Looking for my next Forex trade
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Morning Qui. I lay out the lines manually so the lines don't have prices listed on them. I tried using the Rectangle reader indicator so the prices would actually show up but that indicator has some side effects that are really wonky so I had to abandon it.
Labeling each line would be tedious so all I can really do is post the price levels for each pair as I post them. But one thing you can do also is simply go to the same pair on the same time frame and draw in the same boxes. A pip or two difference either way isn't really a big deal if you draw the lines manually yourself. That will also help you get into practice with finding the zones on charts.
Looks like the typical Wave 2 topping formation with the lower high on the daily TDI. And the candle pattern fits. Only question remaining is how far down they want to take it.
Daily TDI is showing Wave 1 down complete and Wave 2 back up complete. Fingers crossed...LOL! Wave three down soon to begin.
Looks like an even uglier daily AU candle setting up again here Heavy, despite the slightly higher high. This one so far has a tiny little body.
I did go back on the lower time frames and I found another small supply zone that overlaps the first one so that's just a double heaping of resistance for it to fight through.
I also found another small zone right next to the lower one on this last leg up so I've still got part ready to TP at the first weak zone test and the rest set to TP at 0.7250 as of now.
4 Hour Chart update
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The upper zone looks like a textbook classic example but sometimes they just don't work out.
Looks like UCAD may have left the station without me as well. It's moved up over 100 pips from where I closed my long...LOL! Figures...
But the zone below is still really solid there, too. Sometimes the news releases can swing em right back to the zone for just a moment and then go back the other way. Trouble is the spreads are usually so wide it's hard to get in anyway.
I've got the order in place...it'll either take or skip it...LOL! No big deal either way. There's plenty of other stuff to trade.
I think a bit of a pullback is warranted as well, kermit. Most of the dollar pairs are going to recede as the US dollar gets back some of it's strength is what I'm thinking for right now.
Kiwi has been in an uptrending channel here for the most part on the 4 hour chart so I would expect a deeper retrace back down to set up for any potential northerly move.
I went back and looked over the prior zone I had setup for a top end on GJ and decided I didn't like it. The best short zone actually doesn't occur until we get back up to the 170 area. So I'm definitely leaving shorts alone for now except maybe for some quick in and out stuff. The previous hourly zone I had is still holding strong for now.
NJ Hourly Chart
Here's the game plan for the current zone setup.
Plan on entering short at 78.35, give or take a few pips.
Primary TP point is 76.75, again give or take a few.
If that primary target zone gives way, NJ could be a short all the way down to that prior zone, which is not fresh but still could produce a bounce.
USD/DKK 4 Hour Chart
We have 2 zones back to back in this area. As I mentioned before, the first zone is no longer fresh...that's why we fell through it this time.
We're currently bouncing at the top of the 2nd zone in yellow here so it's showing some strength.
But, we have a bearish zone not far above here with the bottom located near 6.65.
So, I'm gonna bail out on my long position at 6.6450 well ahead of the test of that red zone.
Here's the USD/DKK daily chart with the current zone layout. The current zone we're approaching will most likely give us a nice bounce but it has no staying power as far as a true zone is concerned because it's based on a pivot. So I would expect a moderate bounce at best and then more downside later.
The large true zone below these levels is valid but it's not fresh...it's already been tested twice. That's where those last 2 sharp pivots came from. Again, it can give a nice bounce but it's not a true, FRESH zone.
The only true fresh zone we have coming down the line is down around 6.3445. So, if these current zones don't give a substantial bounce, that means EU could have more upside down the road a bit.
All that being said, we'll likely get a good bounce here pretty soon. The TDI wave count is lined up for a Wave 2 of 2 bottom on the chart here so I'm looking for the dollar to gain back some ground regardless. But, the bounce is likely temporary.
I've also included a 4 hour chart at the bottom with a close up view of the fresh zone and the prior zone so you can easily see the large departure candles that signify it as a real zone.
Ok, here's the chart again from the UCAD 4 hour time frame showing what a true zone looks like and what a false zone based on a pivot looks like.
This is why I bailed on the bounce early, even though it may move up a good bit from here.
The bounce right now based on the previous zone is a fake. There are a few major rules concerning true zones that we always need to keep in mind...
1) True zones only show a 4 to 6 candle consolidation and then a large, high volume move away from the zone demonstrated by large candles.
2) A true zone can not be based on a pivot point. A pivot typically shows a quick departure away from an area but only shows a couple of candles at most. As such, any zones based on a pivot have no real staying power and should be avoided.
3) True zones need to be completely fresh in order to have maximum effectiveness.
So, based on all of that, this chart shows that the zone that is currently giving us this bounce is a fake. A previous pivot on the chart showed up on the far left. Price moved up, then came back down to actually break below the pivot point, which automatically voids it for any future consideration. The new low did form a zone BUT there are no large departure candles from that zone, so in effect that zone, while valid to some degree, is considered weak at best.
The true demand zone is located further down. That zone is completely fresh and shows a very large departure candle that ultimately led to the last really large rally. So that's where we want to be long.
On the topside, the last true supply zone we have is located at the far right. That zone is also fresh at this point and fits all of the rules.
So we either go long at the blue demand zone at the bottom or we go short at the supply zone at the top. Nothing in between counts. Profit targets for either trade would be the halfway point between the zones.
Took profit on the UCAD long at 1.2925. Probably going to bounce higher but I'm holding off till later on that one until I get a hit at the real zone.
I'll try to post some charts showing the difference between pivot locations and true zones. This bounce on UCAD is based on a prior zone that was created because of a pivot, so it doesn't count as a strong zone. They almost always give temporary support like we're seeing now but they don't have the staying power that a true zone hit does.
This current zone will probably produce a bit of a bounce but I found a much better zone a bit further down on the 4 hour chart. The top of that zone is sitting right at 1.2765. So I'll probably take profits on this zone hit early and then wait to see if that lower zone gets hit.
UCAD 4 Hour Chart...
Last day of the quarter here so the market is probably going to do it's best to hold steady to get a good showing. We called it "painting the tape" in the penny stock days.
Tomorrow is likely to be a very different story.
UCAD chart says I should be long here so long I am at 1.29076
Now that the US dollar charts have reset and cooled off, it'll be time to start buying dollars again pretty quickly here. I would fully expect that the "bad news" headlines are gonna start hitting the airwaves over the next few weeks again as the dollar rises and the market drops begin.
GJ Hourly Chart
Same exact zone I had marked on the chart by hand before (link back for first chart post).
Caught the bounce to the pip...and of course I didn't take the trade. I continue to be amazed by these true zone setups. That was a super easy 100 pip trade.
Anyone care to know why I didn't take the trade? I was awake when I saw it bouncing right at the zone line. I didn't take the trade because I thought the TDI didn't look good with the new low it made.
Now I know why Sam doesn't use indicators...LOL!
Time to go catch a movie and wait for London to open. Be back later...
LOL! I thought I was going crazy.
I still can't figure out why your TDI looks so different. Did you load up the Synergy_TDI_Basic that I uploaded to dropbox? I can't remember.
Something is definitely off though. 50 minutes to go and the daily hammer is looking good so far.
I just realized that I had the small minor Wave count incorrect on my AU daily chart. The corrected count is below...minor Wave 3 down is coming next. I hadn't updated it in a while.
Oh, you were talking about NU...I thought you meant AU.
BTW, that IHS pattern isn't valid. Remember the rules for a valid TDI IHS during a downtrend. Price has to make a new low at each of the 3 peaks for the left shoulder, head, and right shoulder. Then when the neckline breaks, price has to make one final new low or at least a double bottom.
Anything else is a false pattern.
NU Daily TDI count is a bit odd with this sideways TDI pattern. 4 hour chart though shows a nice channel formed here.
4 hour NU chart...
Unless it moves up substantially in the next hour and a half, the wick is still fully half of the total length if not more.
This is a daily chart I've had for a while now. It's an older chart with my fib boxes still on it.
The other day, I annotated the bottom and showed that the TDI needed to retest a broken trend line, which it has done today. All bets are off on continued topside after that test if it starts curling back down.
All of the other annotations have been there for quite a while.
AU has just been the dutiful puppy following the stock market. That's coming to an end very soon. The daily candle is starting to form a shooting star which would be a fitting end to a run.
Hey Heavy. The top of the current zone is 0.7738 or so. Wave 2 push up on the TDI for the new high with negative divergence on the 4 hour chart. Right now, I'm not expecting anything higher than the zone top but who knows....might fool me.
I really can't help but laugh at stuff like this. They're pumping it out just like pump and dump folks do on penny stocks...LOL!
http://www.cnbc.com/2016/03/30/sweet-spot-for-stocks-is-around-the-corner.html
It's not an easy process Jav...takes lots of practice. Even I find that I have to revise my count sometimes. But the addition of the zones really helps.
I've actually found that both work hand in hand very well Jav. Take the zones for example. What I like to see is the TDI confirming the zone entry with the wave count. So if we're approaching a zone and we're wrapping up a final 5th wave move in the TDI or maybe it's a Wave 2 high or low, then that adds strength to the odds that the zone will work properly.
I like to see some kind of negative divergence at possible reversal points Jav but it doesn't always occur. If you look at the last time NJ pulled back hard from the first zone, the TDI actually made the highest peak. This time, considering how close we were to the zone though, I decided to wait and see if we got the normal negative divergence I like to see and the market obliged.