As pointed out yesterday, there was a great battle yesterday in the euro to decide whether to take it to 1.44 or 1.41. Now we are here at 1.44. In my opinion, this is not the place to go long. For this, i have a couple of reasons. First is the fact that we have moved more than 100 pips in the Asian aka low-volume session after being in a 60 pip range for 2 days. This smells like a trap upmove before we start falling.
Also, take out the weekly chart, you will see a big ABCD pattern that is bearish with the D point coming in around 1.44-1.45. So, for me, this is not a place for longs.
But the euro has been behaving strangely for so many days by not falling despite all the bad news. So nothing is to be taken for granted. With all the bad news behind the euro and with everyone being ultra-bullish abt it, maybe this is the time for a good correction to 1.41 or 1.3950 before the next leg up. Lets see.
Trade Safe!!
Friday, April 8, 2011
Wednesday, April 6, 2011
EURGBP and Interesting Possibilities
For me, the most interesting chart today is that of EURGBP. This is due to a couple of reasons. First reason is that both euro and the pound have huge news events today and so it is safer to stay out of them till we know the correct direction. Secondly, understanding what EURGBP would be doing would give us clues on the future direction of euro and the pound. Using these clues, we can then analyse euro and the pound and try to co-relate them. I love working thru co-relations.
Attached is the chart for eurgbp. From what i see, i believe that yesterdays upmove somehow doesnt look right to me. It stopped at strong resistance at around 0.8800 and is yet to show any attempt higher. I believe that this may just be an upmove to force the shorts to buy and cover so that the big boys can then take it down. So, for me, until this pair is below 0.8800, this looks good for shorting. Break above 0.8800 should lead to further gains. I will be looking to sell as close to 0.8800 with SL just above 0.8800. This trade is supported by the volume as well. Lets see.
So the above scenario indicates euro weakness or pound strength or a combination of both. So, maybe the BOE might raise rates or the ECB may not raise rates or may raise only 0.25% which the market may not be happy about and hence might drop the euro...A very interesting scenario. Lets see what happens. As always, i can afford for my analysis to be wrong but not my trade. So, trade with strict and tight stop losses and ensure that you only enter at the price that you want and not the price that the market wants you to enter in...
Trade Safe !!
Attached is the chart for eurgbp. From what i see, i believe that yesterdays upmove somehow doesnt look right to me. It stopped at strong resistance at around 0.8800 and is yet to show any attempt higher. I believe that this may just be an upmove to force the shorts to buy and cover so that the big boys can then take it down. So, for me, until this pair is below 0.8800, this looks good for shorting. Break above 0.8800 should lead to further gains. I will be looking to sell as close to 0.8800 with SL just above 0.8800. This trade is supported by the volume as well. Lets see.
So the above scenario indicates euro weakness or pound strength or a combination of both. So, maybe the BOE might raise rates or the ECB may not raise rates or may raise only 0.25% which the market may not be happy about and hence might drop the euro...A very interesting scenario. Lets see what happens. As always, i can afford for my analysis to be wrong but not my trade. So, trade with strict and tight stop losses and ensure that you only enter at the price that you want and not the price that the market wants you to enter in...
Trade Safe !!
Thoughts on the Euro
I am absolutely fascinated by the movement of the euro today. Here is a currency which is probably the most important currency in the world today. Here is a currency that has a host of problems and if some people are to be believed, it is on the brink of collapse. Here is a currency which is going to have a big decision on it tomorrow. Tomorrow is not going to be a normal news day for the euro.
Cos something that doesnt happen for 9 or 10 months a year is going to happen. There is going to be a rate hike tomorrow and that doesnt happen usually. In such a situation, the euro breaks a major resistance and keeps going up.
Common sense says that a trader should be on the sidelines or atleast think long and hard before establishing longs when a huge news event tomorrow. So how come people are buying euro now when they do not know what is going to happen tomorrow? Or do the huge traders know something that others dont? Or, more importantly, are they moving this up to trap many traders and then bring down the whole house tomorrow after the news?
Which one of the above is probable? Its anybody's guess and thats why this euro upmove is fascinating. My personal opinion is that euro will move up today and tomorrow and there will be a fall after the decision tomorrow. I believe that all this upmove is to trap the poor traders into longs. I believe euro could go up till about 1.44 or so and then fall.
Well, all the above could happen or none of it can happen and euro could continue to move up to 1.45 or 1.46 and make me look like a complete fool. Whichever way it is, i can make a wrong analysis but i wont make a wrong trade. I will stay on the sidelines till i know the real direction after the news, i will use strict stop losses and will trade well.
Lets see how things go. Be careful with your trades and keep it tight.
Trade safe !!
Cos something that doesnt happen for 9 or 10 months a year is going to happen. There is going to be a rate hike tomorrow and that doesnt happen usually. In such a situation, the euro breaks a major resistance and keeps going up.
Common sense says that a trader should be on the sidelines or atleast think long and hard before establishing longs when a huge news event tomorrow. So how come people are buying euro now when they do not know what is going to happen tomorrow? Or do the huge traders know something that others dont? Or, more importantly, are they moving this up to trap many traders and then bring down the whole house tomorrow after the news?
Which one of the above is probable? Its anybody's guess and thats why this euro upmove is fascinating. My personal opinion is that euro will move up today and tomorrow and there will be a fall after the decision tomorrow. I believe that all this upmove is to trap the poor traders into longs. I believe euro could go up till about 1.44 or so and then fall.
Well, all the above could happen or none of it can happen and euro could continue to move up to 1.45 or 1.46 and make me look like a complete fool. Whichever way it is, i can make a wrong analysis but i wont make a wrong trade. I will stay on the sidelines till i know the real direction after the news, i will use strict stop losses and will trade well.
Lets see how things go. Be careful with your trades and keep it tight.
Trade safe !!
A Note on the 'Experts'
I have interacted with a huge number of traders in my 9 years in this industry. I have interacted with them in person, in forums, in chat, in their blogs, in twitter etc. A common trend among all these so-called experts is the fact that they never seem to make any losses. Zero..None..Nada...
They shout from the rooftops when they make 30-40 pips but when they make a loss or when they make an analysis which goes horribly wrong, you cannot find them anywhere...But why? What is wrong in making a loss? What is wrong in making a wrong analysis? Everyone makes mistakes. If these experts dont ever make a loss (as they seem to be), they should be among the richest in the world who wouldnt bother to waste their time on forums/blogs/twitter...
The simple fact that they spend a lot of time there shows that they do make losses/wrong analysis...So why dont they accept it?
In my entire trading career, i have seen only 1 truly great trader. He trades using his robot and make 80-100% a year. The only one who has made so much on a consistent basis for the past 5 years. And he simply doesnt bother to post on forums/blogs or twitter. He doesnt have the time nor the inclination. Thats how the truly good traders are. And believe me, there arent many around.
I made a mistake with my analysis on the GU bullishness. It may yet be very bullish but i really did not expect it to fall 100 pips. I accepted that i lost the trade and also the fact that i made a wrong analysis.
Its amazing how many 'experts' suddenly find new trendlines, channels etc after the event has happened. And they are excellent teachers using historical charts, not the current ones.
I just felt like posting all this to drill into some newbie's minds that they shouldnt believe everything that they hear or see.
Trade Safe!!
They shout from the rooftops when they make 30-40 pips but when they make a loss or when they make an analysis which goes horribly wrong, you cannot find them anywhere...But why? What is wrong in making a loss? What is wrong in making a wrong analysis? Everyone makes mistakes. If these experts dont ever make a loss (as they seem to be), they should be among the richest in the world who wouldnt bother to waste their time on forums/blogs/twitter...
The simple fact that they spend a lot of time there shows that they do make losses/wrong analysis...So why dont they accept it?
In my entire trading career, i have seen only 1 truly great trader. He trades using his robot and make 80-100% a year. The only one who has made so much on a consistent basis for the past 5 years. And he simply doesnt bother to post on forums/blogs or twitter. He doesnt have the time nor the inclination. Thats how the truly good traders are. And believe me, there arent many around.
I made a mistake with my analysis on the GU bullishness. It may yet be very bullish but i really did not expect it to fall 100 pips. I accepted that i lost the trade and also the fact that i made a wrong analysis.
Its amazing how many 'experts' suddenly find new trendlines, channels etc after the event has happened. And they are excellent teachers using historical charts, not the current ones.
I just felt like posting all this to drill into some newbie's minds that they shouldnt believe everything that they hear or see.
Trade Safe!!
Tuesday, April 5, 2011
Update on GBPUSD
Attached is the updated chart for the pound. The pound broke through major resistance at 1.6300 yesterday. As seen from my previous article, i was not expecting this break to happen so soon. But the fact that it has happened shows that the pound could turn out to be a raging bull over the next few days. With few more news releases being lined up for the pound today, we could see more upside.
Strong support is now at 1.6300 with resistances at 1.6331 and 1.6390. A break of 1.64 could lead to 1.6600.
Trade safe!!
Strong support is now at 1.6300 with resistances at 1.6331 and 1.6390. A break of 1.64 could lead to 1.6600.
Trade safe!!
Short Note on GBPUSD
With todays good news for the pound, GBPUSD starts its climb higher. EURGBP, as mentioned in the previous post, has taken a beating and i will we will see some more downside to it atleast till 8670. As shown in the chart, 1.6280-1.6300 should serve as a very good resistance for GBPUSD and i would expect this to hold atleast for today and maybe tomorrow as well.
So any approach towards this zone can be shorted quite safely. So, with this scenario of EURGBP weakness and GBPUSD approaching its resistance zone, it would be very interesting to watch EURUSD. Would it fall? Add to this the fact of the rate hike this Thursday by ECB and we have a real guessing game going on about what the reaction of the euro would be.
So, for now, it is safer to look for shorts on eurgbp and gbpusd than meddle with EURUSD. Stay out of EURUSD until the direction is clear.
Trade safe !!
So any approach towards this zone can be shorted quite safely. So, with this scenario of EURGBP weakness and GBPUSD approaching its resistance zone, it would be very interesting to watch EURUSD. Would it fall? Add to this the fact of the rate hike this Thursday by ECB and we have a real guessing game going on about what the reaction of the euro would be.
So, for now, it is safer to look for shorts on eurgbp and gbpusd than meddle with EURUSD. Stay out of EURUSD until the direction is clear.
Trade safe !!
Monday, April 4, 2011
EURGBP Outlook
Attached is the chart for EURGBP. My charts will look a bit different than the other charts that you normally see. My charts are based on price rather than time and thats the reason.
Anyway, as you can see, this pair has been ranging for quite sometime with the top at around 0.8850. As it is in a range, this is not the ideal time to trade this pair. The best time would be when it breaks the range (either 0.8850 top or the 8760 bottom). But i feel that the pair is quite weak and so i have taken a short at 8803 with SL of 50 pips and i expect a target of around 8700.
Those who wish to have a safe trading strategy can wait for a break of the range and then take the trade. If the top is broken, expect 8900, if the bottom is broken, expect 8700.
Trade safe!!
Sunday, April 3, 2011
Some Forex Thoughts - 4th April 2011
Hi All,
Been quite a long time since i updated this blog... I am a crazy fan of a sport called cricket (most Indians are crazy about it). There was a world cup going on and i was busy watching that. We have won it and now i am back to full time trading/tweeting and blogging...
So the Euro and Pound continue to range trade though the yen crosses have finally broken through their ranges. Wait for a retrace on the yen crosses for atleast 150-200 pips and enter with a big SL for a huge profit in the coming weeks/months. This is assuming that you are a swing trader.
As for the Euro, i expect it to break 1.4280 sometime this week and the region around 1.4450-1.46 would be crucial. I suspect that we might see a deep correction in the euro from those levels (about 400-500 pips).
For today, expect some range trading and i suspect a down day today. A drop of 100 pips is possible on the euro and the pound and if that happens, we can expect the rest of the week to be bullish.
These are just opinions of mine. Trade with caution.
Been quite a long time since i updated this blog... I am a crazy fan of a sport called cricket (most Indians are crazy about it). There was a world cup going on and i was busy watching that. We have won it and now i am back to full time trading/tweeting and blogging...
So the Euro and Pound continue to range trade though the yen crosses have finally broken through their ranges. Wait for a retrace on the yen crosses for atleast 150-200 pips and enter with a big SL for a huge profit in the coming weeks/months. This is assuming that you are a swing trader.
As for the Euro, i expect it to break 1.4280 sometime this week and the region around 1.4450-1.46 would be crucial. I suspect that we might see a deep correction in the euro from those levels (about 400-500 pips).
For today, expect some range trading and i suspect a down day today. A drop of 100 pips is possible on the euro and the pound and if that happens, we can expect the rest of the week to be bullish.
These are just opinions of mine. Trade with caution.
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