Trades from Friday

Quick look at what happened last Friday.

E/J was stuck in a range for a while, then retested the hourly lows and finally broke out higher.



Similarly, U/CHF squeezed all shorts heavily and then broke out to the upside.



-Tyler

Yen is stronger than ever

We had three very interesting days this week. All yen crosses were pretty much in a freefall and the BoJ threatened with intervention. Probably empty words...

E/U has been caught in a range with the topside limited by 1.2725 with several strong bounces from there.



G/U also hasn't moved much. After the initial break below 1.5478, we haven't moved higher:



U/CAD looks like it has ended its rally. Where? At the daily highs:



And how? With a textbook double-top:



E/G hasn't moved much yet, just whipsawing:



And finally, let's look at the Yen. Daily lows at U/J, E/J and G/J got taken out and all stops evaporated. There were little bounces off those lows for 15+ pips, but one would expect this to bounce more.

U/J:


E/J:


G/J:


I got taken out on the bounces as well, pretty heavily.


-Tyler

Few trades from Thursday and Friday

The most important thing that happened on Thursday was the following headfake that cost many people a lot of money (including me this time). On M1, U/CAD broke support shortly after 7am and went down to 1.0248. From there, it rallied 250 pips in 9 hours. At the time of the fake break, M1 looked like this:



Today, H4 looks like this:



The reason is pretty obvious, it was a 61.8% Fibo bounce. Also we had divergence on the RSI (which I didn't notice at that time :\) This is suggesting upcoming USD strength. The markets confirmed this by heavy selloffs seen in E/U and G/U on Friday.

Moving on, E/G had a few nice bounces. The first long only went for +9 pips, but bear in mind that pips E/G are worth 1.55x more than pips in USD majors.



Finally, U/CHF broke the strong daily support at 1.0350. The break was one of the statement-making ones, over 100 pips in two hours. The support then became a resistance and we had a bounce for 15+ pips.



Finally they put up the price to the previous hourly support and sold off from there.



The weekly close on U/CHF was exactly at 1.0350 so we'll what happens next week. E/U will most likely head lower, along with E/G, judging from strong bearish candles on the weekly. Also, we have a double/triple bottom on U/J daily and a trendline that is begging for a break.

-Tyler

Stick to the strategy

Well, this morning was interesting. I woke up and G/U was up over 150 pips for the day approach previous high. Of course I sold it. It was fighting a bit, the market slowed down, but eventually sold off 25+ pips. This was pretty much it as nothing was happening until after 8am. And since a real man doesn't trade dead markets, I didn't do anything else.



Granted, I should was a bit inpatient with the G/U short as the second one was way better. The next trade was a long E/U after it showed a strong move after NY open. I covered around the previous high.





Then I left for work, but what followed was a textbook bounce from the previous hourly high.



Another one that I missed was a long on E/G. This was happening as I was already long E/U and decided to pass.



And finally, E/J had a solid bounce off support. I would have passed on this one probably, as it wasn't as oversold I would have liked it to be.



What did I learn today? First, don't trade dead markets. This was crucial to avoid any blind sucker plays before the NY open. Second, be smart. Even after seeing a strong breakout, price pulls back before continuation. There's no point jumping in too soon.

-Tyler

Waiting for PA confirmation

Tuesday morning has been interesting so far. I was looking at shorting G/J because its advance was very weak and it was approaching previous high that was also coinciding with a trenline. I didn't short it right away, but rather waited for a price reaction. The reaction came in the form of a very strong bounce. I got in short and exited at previous support:



A similar thing happened on E/J but the reaction a more subdued, because E/G was trying to go higher. I again waited to a reaction, I saw U/J selling off, E/U breaking down and got in short. Exit simultaneously with G/J.



During the day, U/CAD broke the ascending trendline, but 1) I missed this because I was at work and 2) I probably wouldn't have taken it anyway, because the move was rather unconvincing in strength.



-Tyler

Sunday night/Monday morning

We had an unusually active Sunday night and Monday morning this week. Not really sure why, but we already know that we don't trade dead markets, so activity is good. Let's look at some nice trades.

First, last night E/U faked a breakout to the downside and bounced off at 1.2736, I went long around there, because it was a previous important level, and we had a divergence on the RSI. There was also a possible short as it reached the upper trendline of the channel, but I was at work then.



U/J broke the trendline and went down without ever looking back. I didn't trade U/J but instead shorted E/J and G/J.



There were also multiple bounces above 133.00 on G/J. The first bounce was also a trendline bounce and the second was a previous support bounce.



Here's a textbook U/CAD bounce:



And a textbook E/J bounce:



Finally, this E/G bounce was good for 20 pips, but I closed it for -7, because I had to go to bed:



-Tyler

Weekly recap

I haven't posted anything in a while, but that doesn't mean I haven't been trading. It just so happened that 11 hour work days don't leave me much time. Anyways, let's look at some good opportunities from last week.

First, G/U. G/U is difficult to trade, but there are always nice possibilities to take advantage of. Quick glance at the daily chart showed a strong move to the upside, approaching the 1.6000 level.



Looking at H1, the price failed to break above, created a triple top and sold off heaving from there.



The first two shorts were a bet on the bounce off 1.6000. The following long (blue arrow) was a bet on a bounce at the low at 1.5824. Notice that in the image you see it broken, but it had bounced for 20+ pips before the break. Then a short at 1.5900 on a heavy retracement and another short. Finally longs after the valley was created and 1.5560 supported 5 attempts to break it.

E/U - I have only one trade to show - a trendline break on H4.



The trendline was broken heavily by 130 pips on H4, then the price rallied back to it and sold off from there. This is almost textbook, however the execution was a bit difficult here. If I remember correctly, the retracement to the trendline was a reaction to terrible NFP numbers and I don't know many people who're willing to fade that. Anyways, I like fading news...

Moving on, E/G:



The first short is at the previous high, then a long at the trendline. Once the trendline is broken, we buy at a low at 0.8260 and sell it when it retraces to the trendline. An insane fall to 0.8200 where it folds for 15+ hours. Bounce back up to previous support (which now becomes a resistance) where we go short. Cover the short at the low again. Simple? Very simple if you look at it one week later, but the execution is always more difficult.

-Tyler