Higher Lows Lower Highs

[Snow Dog 10]

EJ The week in review. 11 Feb 1hr higher low after divergence

We have been heavily focused on EJ lately. With that in mind I'll go through the early morning days view and see if it played out or reasons to go against the view.

 

The view from the morning of 11 Feb was:

 

EJ - D neg close at the 123.30 support level. We have stalled here for 20 hours and there was buying during previous London and US sessions. Failure to go lower will set up buying opportunities.

 

From London open there were no 1hr candles that set up a sell. There was positive divergence for a buy on 1h and a higher low after the divergence. The 20hrs of support at W M2 held.

[Snow Dog 10]

The view from the morning of 12 Feb was:

 

EJ - D positive close, bias up.

 

There was a move up in line with bias that might have been tricky to get into based on the 1hr candles. Price moved up to the 1/4 Feb highs, W R1 combination and stalled for almost 3 hours with an evening star pattern and 1hr divergence. If bias is up resistance level, W pivot, divergence and 3 hour stall would be sufficient reason to go against the previous bias. If I recall the move down was a news reaction and therefore could have been difficult to get into. Perhaps one of those days.

[Snow Dog 10]

The view from the morning of 13 Feb was:

 

EJ - The positive close on D 11th could not follow through higher. We are still below D RSI 50 level and below 8lwma. 4hr and 1hr now on lower high flow. Bias down.

 

London pushed price up from the W pivot 124.95 to W R1/previous resistance level 126.50. We had a 3 bar reversal (1hr close below previous 2 candle closes) to get back into days view.

[Snow Dog 10]

EJ The week in review. 14th feb

I was unable to post a view that morning. The EJ D had no follow through higher for the 2 days prior.

 

The 1hr shooting star and lower high were straight forward sell opportunities.

[Snow Dog 10]

EJ The week in review. 15th Feb

The view from the morning of 15 Feb was:

 

EJ - These charts looking the cleanest of the 3. There are the Apr '11 highs that can act as support however bias down.

 

There was no follow through lower and the previous support level 123 held. There was 1hr positive divergence.

[Snow Dog 10]

Why post these summaries?

 

To show that firstly you don't always get things right. Secondly to show that you don't have to actually get trades every day to get good results. Third to show that even if you have a view you can go against that view with solid reasons.

 

In fact due to time constraints and illness we only traded for 2 days this week but the results have been extremely good.

[Snow Dog 10]

4hr charts - 2 or 3 trades a week

 

Based on RSI crossing its signal line, as a general rule the 4hr chart will give 2 or 3 signals a week. Perhaps 4 if its particularly choppy. Based on this very simple observation could you use this information in your trading plan entering from 15 min chart?

 

Don't use RSI cross? How about price opening one side and closing the other side of 8lwma?

 

Together with some of the most basic trading concepts and you can add to your plan. Did the 4hr give a double top/bottom, higher low/lower high, stall at a certain level for some time (is there a support/resistance level or W pivot), revert to trend? If you are already in a trade and 4 hr then signals could you stay in longer?

[Snow Dog 10]

EUR GU EJ 18 Feb

 

EUR - Weekly closed a doji, D closed a doji at the Dec '12 highs. Not decisive for buys or sells. Perhaps just treading water whilst the G20, G7 meetings were on. 4hr had a double bottom with divergence but remains on lower high. 1hr on lower high. Bias down with potential move up from the support level.

 

GU - Weekly had a 3 bar reversal closing well below the previous 2 closes. D closed a doji. 4hr showed divergence for move up, still on lower high. We are very close to the lows. Bias down with potential move up from the support level.

 

EJ - D closed a hammer RSI above 50 level. 1hr flow higher high higher low, bias up.

[Snow Dog 10]

Not a lot happened yesterday with the US holiday.

 

19 Feb

 

I'll retain the bias from 18th.

 

EUR - Bias down with potential move up from the support level.

 

GU - Bias down with potential move up from the support level.

 

EJ - Bias up.

[Snow Dog 10]

One of the things we did pick up on, in most recent losing trades over the last few months. When 1hr has back to back hammer/shooting star, even when following trend there were losing trades. Its only a very small sample but when something like 4 of 6 last losing (system) trades is this exact set up it should get your interest. We treat hammers/shooting stars back to back with a lot more respect.

 

This chart is just an example not a trade taken.

 

In this case after the hammer we'd be thinking buy perhaps, getting in and the low of the hammer was failing, in the 1hr candle immediately following the hammers close.

[Snow Dog 10]

The EJ 1hr lower high shooting star at Frankfurt open was a good sell, even if counter to the up bias. That was too early.

 

We are in long at 124.85, pushed up to 125.20 and came back, will exit at BE if RN holds.

[Snow Dog 10]

Reached M2 at 125.20, stop moved to BE.

[Snow Dog 10]

Mrs V is making those leave overnight noises, EJ due for a pop up.

 

We have an open 4hr candle, if it closes strongly that should signal one of the 2 or 3 decent trades that happen a week from 4hr.

[Snow Dog 10]

Recap 19 Feb

 

EUR - View was bias down with potential move up from the support level. W M2 1.3332 held for 7 hours and gave buys after US open and then a little later in session.

 

GU - Bias down with potential move up from the support level. We did move down after 3hours failing to go up and 2 decent upper wicks on 1hr..

 

EJ - Bias was up, it played out when support level held for approx 7 hours.

[Snow Dog 10]

20 Feb

 

MPC minutes this morning one of the days I will either trade early or wait until after the news.

 

EUR - Positive D close off the 1.33 support area, slight RSI divergence. 1hr flow now higher high higher low. We stopped at the W M3 pivot 1.3439. Cannot explain why I have doubts about this move up but charts say bias up.

 

GU - D negative close, RSI not moving lower. We are in the area of July '12 lows 1.5400/25. 4hr, 1hr flow down. Bias down.

 

EJ - D close did nothing, moving up over night in Asian session. 1hr flow down after the double top 125.90. A solid 1hr engulfing close would confirm move up. Bias up but a negative, engulfing close on 4hr could change that.

[Snow Dog 10]

This might be a blown trade. Had TP just below RN hoping that W pivot would get pushed through. It didn't, amended TP and just have to hope we push up to test the double top (see 4hr chart) for a 3rd time.

 

I'm not holding my breath, Mrs V wants us to leave I think 40 pips here is still a decent trade.

[Snow Dog 10]

This might be a blown trade. Had TP just below RN hoping that W pivot would get pushed through. It didn't, amended TP and just have to hope we push up to test the double top (see 4hr chart) for a 3rd time.

 

I'm not holding my breath, Mrs V wants us to leave I think 40 pips here is still a decent trade.

 

Stop held by 2 pips. Exited +48.

[Snow Dog 10]

Recap 20 Feb

20 Feb

 

EUR - View was: We stopped at the W M3 pivot 1.3439. Cannot explain why I have doubts about this move up but charts say bias up. Price stalled at the Asian highs/W M3 for 4hrs with divergence on 1hr. The main part of the fall happened after we stopped trading.

 

GU - View was: We are in the area of July '12 lows 1.5400/25. 4hr, 1hr flow down. Bias down. Strong fall on the news.

 

EJ - View was: 1hr flow down after the double top 125.90. A solid 1hr engulfing close would confirm move up. Bias up but a negative, engulfing close on 4hr could change that. We did get the engulfing negative close and move down.

[Snow Dog 10]

EUR GU EJ 21 Feb

 

EUR - D lower high, engulfing negative close. 13260 gave support for about a week in Jan. The D close should follow through lower, bias down.

 

GU - Bias down.

 

EJ - D lower high, engulfing negative close. 1hr lower high lower low flow. Bias down, support level 123.00. I wonder when the JPY authorities will work to push yen up again?

[Snow Dog 10]

Recap 21 Feb

 

EUR - View was: D lower high, engulfing negative close. 13260 gave support for about a week in Jan. The D close should follow through lower, bias down. We did fall.

 

GU - Bias down. We fell into Frankfurt open but from there a strong push up.

 

EJ - D lower high, engulfing negative close. 1hr lower high lower low flow. Bias down, support level 123.00. Fell 80 pips below the 123.00 support.

[Snow Dog 10]

EUR GU EJ 22 Feb

EUR - D negative close stopped at the next identified resistance level 1.3166/W S2 1.3181. 4hr showing lower wicks and divergence, RSI crossed above signal line on an open candle. 1hr showing divergence and the higher low following the divergence played out nicely in Asian session. 1hr still on lower high lower low flow. There is nothing to suggest that this is anything other than a rally in down trend. We could fall today or in two days. Short term counter trend buy (but that ship may already have sailed), looking for return to down trend, bias down.

 

GU - D closed a hammer and with Asian move up already up 200 pips from yesterdays lows. 1hr on higher high higher low flow. Unless there has been a fundamental shift caused by news would expect some multiple day reversal pattern to play out. Would normally consider a day like to day as opportunity to buy and sell should good set ups arrive. Like EUR the counter trend move up may have gone too much to enter safely. We had hit 50% retrace of last leg down. So now the bias would be to wait for sells.

 

EJ - D suggests down but for now the move below the 123.00 support level has been rejected. 4hr has not yet closed above RSI signal line/8lwma. Should that happen then a move up attempt might be made.

 

Friday mornings are often volatile around London open and we don not generally trade that session (often very good trades in the hours preceding).

[Snow Dog 10]

EUR GU EJ 21 Feb

 

EUR - D lower high, engulfing negative close. 13260 gave support for about a week in Jan. The D close should follow through lower, bias down.

 

GU - Bias down.

 

EJ - D lower high, engulfing negative close. 1hr lower high lower low flow. Bias down, support level 123.00. I wonder when the JPY authorities will work to push yen up again?

 

Was asked if we traded yesterday. We missed the move down for a couple of reasons but got a CT buy on a different method for +40, didn't post here for that reason - not this system.

[Snow Dog 10]

W pivots, 4hr charts

 

Posting to show yet again how important the W pivots are and that there are normally 2-4 trades a week from the crossings (RSI/8lwma) and price action including divergence.

[Snow Dog 10]

Recap 21 Feb

EUR - View was: There is nothing to suggest that this is anything other than a rally in down trend. We could fall today or in two days. Short term counter trend buy (but that ship may already have sailed), looking for return to down trend, bias down. Lots of upper wicks around London open, fell nice after LO. At US open another upper wick with a shooting star and we fell nicely as per bias.

 

GU - View was: Would normally consider a day like to day as opportunity to buy and sell should good set ups arrive. Like EUR the counter trend move up may have gone too much to enter safely. We had hit 50% retrace of last leg down. So now the bias would be to wait for sells. There was a double top and then a negative close in US session started move down as per bias. The big drop only happened very late in session with GBP getting a rating down grade.

 

EJ - View was: D suggests down but for now the move below the 123.00 support level has been rejected. 4hr has not yet closed above RSI signal line/8lwma. Should that happen then a move up attempt might be made. Upper wicks after London open and a negative close hammer signaled move down.

 

Friday mornings are often volatile around London open and we do not generally trade that session (often very good trades in the hours preceding).

Edited February 24, 2013 by Snow Dog

[Snow Dog 10]

25 Feb

 

EUR - D closed a doji, in itself not a strong signal. 4hr still clinging to the lower high lower low flow, divergence is showing and RSI has crossed above its signal line. Until flow properly moves higher bias down.

 

GU - GBP was down graded late Friday night, it remains to be seen whether this bad news will follow through. Had a gap down which is likely to be closed, so a possible move up to 1.5160 area. Still no reason to believe its anything other than a rally in downtrend. Bias down.

 

EJ - Rejected another attempt to go below 123.00. D closed an inside bar, still just on a lower high lower low. 4hr had a higher low positive close hammer. The gap up will need to be closed suggesting a move down to 123.20 area.