Hello All,
Lets start off this new round of blogging with a simple, straight forward daily chart of EURUSD. Many traders like to overcomplicate things but i like to keep things simple and clear. So, as attached, you have a daily chart of EURUSD with a fibo of the last swing plotted on the chart. I always prefer a fibo of the last swing on the chart rather than any earlier ones and i always draw the fibo in the direction of the swing. If the swing, as in this case, is from top to bottom, i start the fibo from the top and draw it to the bottom.
Now, you can see why it is important to keep the chart simple. It is very clear now that after a 2 day struggle to overcome the 38.2 of the last swing, the euro has finally had a breakout from the region and has crossed the 38.2. Now, all we need to do is wait for Monday London session to see whether the 38.2 is still holding and if yes, take a long. The Target? the 50% of the last move which comes in around 1.4030. We can see a whole lot of resistance there and so it is indeed a very good place to exit your longs and initiate some small shorts in expectation of a retracement. Why small? Cos the trend is up and you dont want to be betting huge lots on a counter trend trade.
So is that all? Yes , indeed. It may sound simple but that is all there is to it. But remember, analysis is always easy. Trading isnt....
Lets start off this new round of blogging with a simple, straight forward daily chart of EURUSD. Many traders like to overcomplicate things but i like to keep things simple and clear. So, as attached, you have a daily chart of EURUSD with a fibo of the last swing plotted on the chart. I always prefer a fibo of the last swing on the chart rather than any earlier ones and i always draw the fibo in the direction of the swing. If the swing, as in this case, is from top to bottom, i start the fibo from the top and draw it to the bottom.
Now, you can see why it is important to keep the chart simple. It is very clear now that after a 2 day struggle to overcome the 38.2 of the last swing, the euro has finally had a breakout from the region and has crossed the 38.2. Now, all we need to do is wait for Monday London session to see whether the 38.2 is still holding and if yes, take a long. The Target? the 50% of the last move which comes in around 1.4030. We can see a whole lot of resistance there and so it is indeed a very good place to exit your longs and initiate some small shorts in expectation of a retracement. Why small? Cos the trend is up and you dont want to be betting huge lots on a counter trend trade.
