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Mysticforex

EUR/USD Intra/Inter Day Analysis.

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Probably the most traded pair in Forex. I tend to shy away from trading it.

Seems like I alway's get burnt on this one. I keep telling myself I will not trade it again.

Then I see something on my chart that looks very promising, and jump back in. Only to get burnt again, or just get out by the skin of my teeth.

So, maybe I can get some enlightenment from other's ideas on where they think E/U is headed.

 

True Story:

When I first got into Forex I decided I was going to be a Fundamentals Trader. I had heard of charts, but had never actually seen one. My very first trade was EUR/USD.

I had just returned from Europe and it had seemed like it cost me a lot to exchange my

Dollars for Euro's. So I figured the Euro must be hot. I bought 5 Standards Lots Long.

Lost $1500 in a heart beat. Maybe that's why I am gun shy.

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I usually post the trades I am taking in the UTA sponsored link but I thought I would contribute to this thread. I did post to the gbpusd with an example as well. I think that for daytrading, if you have an effective strategy, the eurusd is a good choice, mainly because of the low spreads but also, because it usually has good movement. Also, for longer term position trades, I think one can do very well with this pair. Here are three charts showing the strategy that I use.

 

The tradeplan is very strict in that for the Euro session, you only trade it from 2 to 5 am est. If still in a trade, you can continue to hold it until it finishes. The US session begins at 8:30 est (at least, for this tradeplan and strategy). Here's a look at the results from today.

 

The third chart is of the same strategy, on a weekly chart for longer term holds, but with different indicator settings showing the last several trades. My backtesting shows a very strong 75% win rate over the last 10 years and so far, the ongoing trades are holding up, as you can see from the last several recent trades. This would be a great one to use in a tax free retirement account. Of course, responsible position sizing is a must and one should be very careful not to over leverage, as with any trade (again, imo). Even a strong winning strategy will throw a series of losses at any time and so smart money management is critical to stay in the game to take the next trade, right? :)

 

I guess the main point I would like to make with these examples is the importance of a well researched tradeplan. This plan uses a 2 (can do more) position approach with very defined trade mgt maneuvers. One position comes off at a fixed target that the strategy has determined has a good chance of succeeding. The other position trails. The stop actively adjusts to cut rist, then get to risk free, and finally, if the trade gods are smiling upon us, will continue trailing for a bigger move. It also identifies increasing price momentum and allows to add to the existing position. You can see a variety of how this works in the examples I've posted.

 

Plan your trade and then trade your plan, so the conventional wisdom says. I fully agree.. I realize this is just one style of trading but it shows a good example of a tradeplan at work, with well defined trade setups, entries, targets, stops, mgt rules, etc.. Same market, same strategy but on different timeframes.

0302011_eurusd_blog.thumb.gif.64beb5d101c7466e3097ec768eb698ea.gif

030211_eurusd-us-blog.thumb.gif.f0d6389906e32532a4765d18fb153fa6.gif

030211_eurusd_weekly.thumb.gif.3e498371d265896e2ec78c98b9862ad1.gif

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Happening to fast to post video.

 

Chance to short E/U with very tight stop.

short 14190 stop @14210 TP 14180

--------------------------------------------------------------------------------------------------------------------------------------

eu5m.thumb.gif.7813c4b61dd795624426e53fa7af0191.gif

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  Mysticforex said:
Probably the most traded pair in Forex. I tend to shy away from trading it.

Seems like I alway's get burnt on this one. I keep telling myself I will not trade it again.

Then I see something on my chart that looks very promising, and jump back in. Only to get burnt again, or just get out by the skin of my teeth.

So, maybe I can get some enlightenment from other's ideas on where they think E/U is headed.

 

True Story:

When I first got into Forex I decided I was going to be a Fundamentals Trader. I had heard of charts, but had never actually seen one. My very first trade was EUR/USD.

I had just returned from Europe and it had seemed like it cost me a lot to exchange my

Dollars for Euro's. So I figured the Euro must be hot. I bought 5 Standards Lots Long.

Lost $1500 in a heart beat. Maybe that's why I am gun shy.

 

How true is your post! I can understand you. However I love to trade on trends :) Today I was long on Euro on Zulutrade's autotrading platform, with a Limit on 1.4440 and I feel very happy for my earning pips. Now I should stop...but a voice inside me does not let me!!!

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Not sure if this is the right thread but thought I'd share my thoughts on EUR/USD longer term positions based on daily charts.

 

The EUR/USD continues to rise.It is now the highest it's been since 12/1/10. Calculating fib levels based on the uptrend of 9/1/11 - 2/2/11 would indicate after that date price rose dropped to approx 61.8 fib level of 1.3470, back up to the fib 100 level of 1.3859. It then traded up to the last significant high level of 1.4287 (4/11/10, which was also a significant support level when the high of 3/12/9 dropped away). Price broke through and stalled at the 161.8 fib level resistance level of 1.4497 for a few days until after a pull back to 1.4287 it bounced up to the 1.4648 level it's now testing. The 1.4497 resistance level has now become the new support.

 

Therefore if the price can firmly breakout above the 1.4648 level - e.g. close for 2 days above this level, higher highs and higher lows etc - then going long would make sense. Profit target around 1.5144 (the significant high of 2/12/9). A bolder profit target could be the 261.8 fib level of 1.5493 that price crossed several times between 13/3/8 and 7/12/8 - though it seems less likely to push that far. Stop loss around 1.4480 - a resistance level tested between 8/4/11 - 15/4/11 and the support tested on 25/4/11 that's flipped to a support level.

 

All this could be affected by Ben Bernake tomorrow so I might do an update once I've digested it.

 

Please note the value are not absolutely pip accurate but I think paint a good picture, Does this analysis seem correct to other people? I'm still very new to trading so have stopped putting trades on to plan more in longer time frames.

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You have promised us an update... after Ben Bernake' s speech. I am very interested to compare both cause I have some open trades of EUR/USD on my Zulutrade's account.

Thank you in advance.

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Hi fxallday, just realised I didn't post an update. Well the Bernake speech didn't have much of an effect, though I was very surprised by the impact of Trichet's speech about Euro interest rates staying the same for a while to come on 5/5/11. Across all EUR pairs there was quite big movement.

 

Despite the massive drop in the EUR/USD price has failed to breakthrough support of 1.42879 (the high from of 4/11/10 that was only broken 6/4/11) though has tested it with lows below it the last 2 days. Drawing fib levels of the whole uptrend starting on 9/1/11 we haven't dropped below the 61.8 fib level since 1/4/11 and no lows have even broken through it. Drawing a trend line through the lows of 9/1/11 and 8/14/11 does show a break through on 6/5/11 with closes below it each day since, adding strength to the argument that the long term trend has broken and price will continue to drop.

 

I'm planning to wait for price to get nearer to the 61.8 fib level of 1.41385 and see how it behaves with a view to go long with a target around the resistance of 1.45222, stop loss below the support of 1.40091. If price shows strong movement to the downside aim for the support line of 1.38535 with stop loss around the 1.42879 resistance.

 

What thoughts do you have fxallday, you mentioned you had some open trades, are you still long or have you switched short?

Obviously that trade idea I posted above would have been stopped out, I'm glad I held off for the two economic announcements before placing the new trade.

Edited by iwshares

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Thank you a lot iwshares.

 

My Signal Providers and I have made many trades on Euro/Usd. Long short there was a "trading traffic" last days.

I will tell you the paradox in my current open positions:

Some trades long on Euro at 1,43.30

Some trades short on Euro at 1,42.20

Current price of Euro 1,42.87

:doh

 

However I have set S/L, I always "return" in Zulutrade' s platform to check how is it going...

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  fxallday said:

I will tell you the paradox in my current open positions:

Some trades long on Euro at 1,43.30

Some trades short on Euro at 1,42.20

Current price of Euro 1,42.87

:doh

 

Well some people hedge as part of their system e.g. hedging inside bars so not necessarily bad. Mind you I have run into trouble in the past few days hedging as you have, though as long as they don't have too tight stops the market will go one way in the long term and you can then close the wrong leg of the hedge. I'm currently long entry at 1.43207 (in hindsight I entered early, should have gone in about 1.43485, above a better resistance but oh well, hindsights a great thing) with a stop loss at 1.41810.

 

Looking at monthly charts we've been in an uptrend since 2001, though the high of last month was (slightly) lower than the high of Jan 2009 which was also lower than the high of Jul 2008. The low of June 2010 was also lower than the low of Oct 2008. This could indicate a change to a long term downtrend. If price doesn't breakthrough 1.5 this could be a strong signal a downtrend is in progress. I'm going to keep watching the chart.

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Thank you a lot for this analysis.

You believe that price has a memory...

I am rather trading on the trend. In zulutrade' s platform "hedging" can happen many types as my signal providers decide to buy or sell in different price.

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  fxallday said:
Thank you a lot for this analysis.

You believe that price has a memory...

 

Firstly thanks for the thanks. To clarify, I don't believe price has a memory, more that there are key support and resistance levels (around which people often place stops), that once broken may indicate a change in trend.

 

There definitely exists a conflict in EUR/USD. On the one hand you have the lower highs since the 1.4939 high of 4/5/11. However this has been accompanied by higher highs. This narrowing of range/flag pattern would suggest to me we are approaching a breakout - possibly strong due to the time it's taking to form - though I couldn't call in which direction. It will be interesting to see if price breaks above the 1.44417 resistance, and also the upper trendline over the course of the current short term uptrend.

5aa7108471701_eurusd1d280611.thumb.gif.8e1df67f37d6cddb50f3d0eeb6b9d7fe.gif

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Has anyone noticed the pattern on the EURUSD on an hourly chart. If you look at it during Europe hours they are selling and then US traders are buying it back up. This has been a great trading up to this point.

 

Additionally there is a great parallel trend going on the USDCHF daily chart. This is one of my favorite setups.

 

1382.gif

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  Bohica said:
Has anyone noticed the pattern on the EURUSD on an hourly chart. If you look at it during Europe hours they are selling and then US traders are buying it back up. This has been a great trading up to this point.

 

Just curious, how does anyone, yourself included, know who is buying and who is selling?

 

Do you work for a major hedging firm?

Are you just guessing because of the time zones?

Did you hear this on CNBC?

 

Again, just curious.

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Hi FXAllday,

 

Not sure if you are still reading this forum but I've got some more thoughts on EUR/USD:

 

Price has been in an intermediate term downtrend since hittting the 1.49 high in May. Rather than following the IT downchannel, price formed a triangle, which broke out to the downside 11/7/11, This breakout reversed at point A. Was this a false breakout of the triangle or was that the fullmove?

 

Price then entered a short term upchannel, within the IT downchannel. It has hit resistance at 1.445 and pulled back, though still within the upchannel. There is the potential of an upward triangle forming, which indicates a possible break to the upside. However price not returning to the upchannel upper edge indicates a possible failure of the up channel and a breakout to the downside, keeping price withing the IT downtrend.

 

As written on the chart Plan A would be to short a retest - if it happens - of 1.445.

 

Plan B would be to go long if price breaks through the 1.445 resistance, the IT downtrend line, a "real" breakout of the first triangle and a breakout of the upward triangle forming in the ST upchannel. Be aware of possible resistance around the last IT downtrend touch at 1.4577.

 

Hope this is of use to someone, please note this is not trading advice, just my take on the current situation and I would appreciate anyone else's thought/comments.

 

 

Thanks

IWshares

 

 

N.b. the upward lines on the chart represent the 50% and 75% points of the channel. Will price move into a sideways range if the triangle "expires" without a firm breakout?

5aa71090ae020_eurusd240711.thumb.gif.e7d99946016315afb8fb86ac4591de29.gif

Edited by iwshares

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