Hello,
Just a quick look at 3 currency pairs. I hope you will find my technical analysis observations useful.
Don’t forget to keep your trading system simple, it will work better!
Regards,
Dan
Life Holdings Management
Archive for the 'technical trading' Category
I’m not good at explaining stuffs, except I can only say, the more you practice, the better you get. And treat all demos as serious as how you would treat your own money. Here’s two trades triggered on my account. One from yesterday (USDJPY) and the other today (GBPJPY).
USDJPY +101 pips (still running)
GBPJPY +137 pips (still running)
First step, Don’t Ignore Fundamentals
First for the fundamentals, I do look out on whether will there be any economic indicator releases which might affect my technical trade. None for the dollar, yen or pound that might.
Your Trend Lines Matey
I could do better with the help from Mouteki’s methods found actively popular in Forex Factory (kudos to their niche forum on forex) and would rewrite a trendline tutorial on the next few entries. Go with your trend lines. They are extremely important to determine your positions for either a long or short. Break outs pips are fairly nice and can be rewarding to pocket if you read it right.
Fibo? Hmm
Draw Fibo retracement levels. The levels you should be looking closely at are 38.2, 50.0 and 61.8. Again, if you do not understand how to draw them. I’ll touch them in the next few entries in conjunction with our Forex Trading Guide for Beginners. Trend lines and Fibonnaci Retracement levels work like perfect partners in crime.
MACD (Optional)
I like to look at MACD as my oscillator indicator for directions on overbought or oversold. Personally, I’ll be looking at longer duration charts (4H, Daily) to confirm the trend, and shorter duration charts (30M, 1H) to determine a new short or long position.
200EMA/SMA Lines For You Baby! (Optional)
Again, its individual preference. Any traders will argue on their own system and trading methodology, but in my case (All thanks to Dan), 200EMA/SMA lines works amazingly as a guide on market direction. My MACD could tell me where the direction is, and the lines will be where the price action of the candles might be going. Candle formations can tell you alot on market sentiments of buyers and sellers too. You can check out our candlestick tutorial if you’re interested on price action and candle stick formations (Our Nobs Network friend J swears by price action)
Stop Loss! Stop Loss!
Always set your SL level even for Buy/ Sell Limit or even Buy/ Sell Stop positions. They might be triggered and head to nowhere to your benefit (Or worse, margin call? lol). I’ve spent time tweaking my own SL levels by swapping my charts to line charts to look closely on the support and resistance level and picking a number comfortable to my benefit, the general guideline is never to lose 5% of your account size in all open positions.
Setting the SL too small might be a problem too, so again, practice and you’ll be able to spot which pairs are usually the volatile ones that might trigger your stoploss for nothing. (The Cable is one good example).
SL can also be your good friend to bag pips if you’re not sure whether you should be exiting soon (Just move it up and don’t be greedy so you can set targets of how many pips you should be locking). At least you wont have to pay pips spread to your broker if its goes towards your intended buying direction. No?
PIP away!
Identify a good exit with Fibonacci, Trendlines, and Support and Resistance from short to long term charts!. Bottom line, Practice!
Been talking alot with Dan from Life Holdings lately, he’s a fantastic tech trader despite being such a young age. Take a look at these simple charts and see if you can understand the interpretation.
Current GBPJPY 4 Hours Chart
Current GBPJPY 1 Hour Chart
Current GBPJPY 1 Hour Chart – Range
USDJPY Mouteki Trade
I’ve been sharing with him on my personal problem of entries and exits, though we’re using both the same trading methodology and these charts has enlightened me a great deal. THere are a few more charts that he touched on, but I think these will be enough for now.
We’ll explain on the charts later, but let’s see if anyone is able to tell what did he drew?
A friend of mine, J quoted that it’s pointless to do predictions for the following week since people always buy and sell, and everything right now is just a guess. It would be better if you understand price action and volume, read the market each and everyday. That’ll I have to put my hats to him and agree.
I’ll still be doing this to sharpen my Technical Analysis. Don’t take me wrong, this is meant to be some sort of homework I do for myself, and it might not work for you. Never use anyone’s signals or advice to open any positions. Trust your own studies, judgement, and if you’re new, to your demo account. (It takes pretty much countless of blowing to demoralize you to let you know trading the real thing isn’t easy)
GBPUSD
Main trend is still bullish. With the MACD just reversed to the upside on Daily, a long position will be desirable next week if there are no major news annoucements or so.
GBPCHF
Crossed the 200EMA lines on 30M, 1H and possible of crossing it soon on the 4H chart. It crossed the lines on Daily though. Looking at the candles on Daily, a hammer is formed before the closing. For a short confirmation, we’ll need the opening to come with a longer bear candle beside it for the opening. Whilst most indicators on this pair should be bias for a long, we’ll side step for now.
EURUSD
Main trend is bullish. As it just broke out towards the upside before the closing of the week, we’ll keep tab on the movements in the opening and if any news will be affecting this pair. It crossed all 200EMA/SMA levels, and the MACD on the daily side is reversing towards the upside. It might retrace, so side stepping for the moment.
EURAUD
A doji formed on the daily, with a possible reversal of MACD, daily charts towards the overbought zone. It looks more bias for a short, note the position of 200EMA lines as well.
USDJPY
The dollar is picking up steam on JPY. Definitely bullish from the way we look, just only crossed the magic 200 EMA lines with MACD reversing almost on all duration charts. It’s within the 38.2 to 50.0 fibo range (H4 chart), so it might range awhile here.
My homework for the upcoming new week as follows:
GBPUSD
Still on the uptrend. Not much changes. Seen a doji forming on the H4 and daily chart. Should be a good opening towards the beginning of the market. Watch out for the candle crossing the 200EMA lines and MACD reversing to the positive side for confirmation. Bullish
GBPJPY
Uptrend as with GBPUSD. Possible retracement to the top since its around the 23.6 level on fibo (H4 chart). Just watch out for signs on 30mins to 1hr for candles to cross 200EMA lines and make sure MACD goes in line with them. Not too sure on how the market is going to open for this one, but chances of it siding the bulls is higher. Unconfirmed
EURUSD
Channel is on the uptrend. The candle just crossed 200EMA on H4 but MACD isn’t showing yet. Will look at the shorter time charts on the market open before doing any trades for this one. It’s currently ranging between 23.6 and 50.0 on H4 fibo, closer to the bottom trend line for now. We’ll see it drop further down if it crosses 1.364x zone. Unconfirmed
USDJPY
Channel looks like its going down for the daily chart, but its looks good on short term charts like 30M, H1 and H4 for a retracement to the top side. Wait for further confirmations. Currently resting close to 23.6 region on H4 fibo. Bullish
EURJPY
This pair has been on the uptrend steadily on weekly charts till a week back. A doji formed on the closing of last week, with a further possible of going down on the main trends. Look out for short term charts like 30M, H1 and H4 and the correlation between 200EMA/SMA lines and MACD to confirm before entry. Unconfirmed
AUDUSD
Main trend for AUDUSD is up, although it seems to have been shaky last week. Look out for signs on MACD reversing for the smaller charts (and if it syncs with the candles to trip the 200EMA/SMA lines on the top), it can be a bull, or a bear, since it looks easier to break the trend line below. Unconfirmed
EURUSD
Main trend is heading downwards, but it seems like EUR is making a comeback with a strong closing prior to last week. It looks very strong on the upside, in lines with the 200EMA/SMA lines and is very close to the main trendlines on the top. Either it retraces back to the bottom or the top depends on the opening. Unconfirmed
USDCAD
Very weird pair, and not one of my favourites to tinkle with. Main trend is still heading down. Looks closer to the trend line on the bottom than the top, although smaller duration charts (30M, H1, H4) might be supporting more of a uptrend movement for the opening. Unconfirmed
EURCHF
Uptrend still continues with the channel. We’ll wait for H1 candle to pierce more prominently through the 200EMA/SMA line and more sure signs on MACD before entering a trade. The pair is ranging and might possibly retrace to the 38.2 – 50.0 fibo zone based on H4. Bullish
As I have mentioned on my routine before. Usually before the market opens for the week, I’ll be flipping Daily and Weekly charts to see how it will look for the long run. Here, I present to you my studies for the week.
- GBP/USD
Chart on Daily and Weekly still shows the trend is upwards. But take note that there might be possible retracement as a Pin is on the 4 hour chart.
- USD/JPY
The dollar might still continue to slide against the yen as we see on weekly that the MACD might be reversing towards the oversold side and the 200EMA/SMA lines as well. The potential to break the trendline on the bottom is alot higher than the top.
- EUR/USD
This pair seems to be correlated very well with the cable since it’s still onwards the uptrend. We can just see probable retracements, but there should not be any big movements.
- AUD/USD
The Aussie is more prone to break the trendline on the bottom than the top. MACD is reversing for the daily chart and it might head towards the 200EMA/SMA direction.
- USD/CAD
Dollar is gaining ground against the Canadian dollar. There might be a reversal of trend (but ah well, this pair has been an oddball for quite awhile). The MACD is showing a reversal, and the price has pierced through the 1 hour chart for the 200EMA/SMA line.
If you have different opinions or have something to share with us, feel free to drop a message!
Dan on NN explains on a perfect setup he spotted with AUD/USD on the daily chart.
We’ll bring you more on adding indicators to your Meta Trader 4 as well as touch on some basic ones on the next continuation of the Demo series, which will be good for beginners in if followed in chronological order.