TRADING FORK EXTREMES – 3 month Setups.

[Summerset]

Originally Posted by zunis-myst

http://www.dailyreckoning.com/index.html
[ATTACH]28755[/ATTACH

THANKS for the link Zunis. Its Real Good Source.

[Summerset]

Originally Posted by Summerset

Eurodollar seems to be breaking upwards from an ascending triangle. (Chart-A). If the Acceleration cycle (ADX) truns upwards, the issue willbe embarking on a new upleg in the TREND.

Try to buy the triangle's bottom of course at 5750, and double at 5685. A buy stop can be placed at 5999.

I am changing my bias to an ending diagonal - See Chart-A & B, for a complete alter in the entries / exits strategy.

Chart-C, also supports the ending diagonal view. But mind that 6030/40 can still be made on attacks again at the diagonal's top. So its really a two way market, and I expect the diagonal to extend & thinout considerably.

Mid term, however, the current support is certainly weaking for an extended ABC zigzag correction down to alter with the previous flat ABC correction.

Profitable trading

[rufffen]

hehe, no offence summerset, I like some of your methodology, however a buy stop placed at 5999 will be like -300 pips now.

Nice 1 hour chart with green daily rectangles, I even got a clue what these are.

Good to see you posting, just come by more often.

[Summerset]

Originally Posted by rufffen

hehe, no offence summerset, I like some of your methodology, however a buy stop placed at 5999 will be like -300 pips now.

Hi Ruffen.

No offence taken - Really None

A Buy Stop entered at 5999 would have been closed at 5740 at -200 pip loss.

I have attached a chart that explains more on this particular methodology. (See 1hr chart below).

Remember - as refered in an earlier post, - on a Bull Trend, I would buy the market, (or the closest grey / blue box, in which the market is trading) keeping stop < Daily low or Y'day's low registered.

In the case of the 5999 entry, Next day's low contested the day's before low, and held.

y'day however, the day's before low was contested at 5850, and broke. The stop in this case being placed beyound y'day's low, was placed at the next blue level down at 5800 = -200 pips on this particular lot. Remember that the trader would have also bought other day's lows too, possibly at 5830 & 5860. The important thing is to manage the risk during the accumlation phase on a daily basis and keep it below 3.5 -->5% of overall account equity. Even if this means closing some of the lower lots at break even or very little profit, as the higher lots compound losses on a counter trend move to strictly preserve risk control at 5%.

On TRENDING issues this kind of accumlation is warranted because:-

(1) -remember we"re longtermers going for the quarterly (45-90) days breadth of the issue, so a stop at 150 pips still yields an R;R ratio of 1:3, when yr targeting 6250 & 6700

(2) - U never really can know, when such trending issues are next going to breakout in their bouts of volatility. So our job is ALWAYS to keep the account fully vested and circulated amongst TRENDING issues / markets, and to a Low risk exposure - If U do this homework well, Then just let the market do its job, and it will reward U well too.

[Summerset]

It seems that ending diagonals are in the fashion with the Eurodollar.

After the daily & 4hr ending diagonal, an alternate ending diagonal (Bullish) has completed on the 1hr frame, (See Chart-A). A buy signal has also materialized on 1hr

Its time to buy the market <5335> & 5320 which should be seen today. Target 5530 (diagonal top), Stop 5260 (Below today's low).

Another diagonal too has formed on the 4hr, note that we are buying the 2.618 on the 1hr & 0.618 on 4hr.

The 4hr signal however is yet to materialize (Blue arrow on Chart B).

At 5530, we will contemplate to re-long or short as momentum unfolds, & the resistance at the diagonal's top shows strenght / weakness.

Profitable Trading

[El Grande]

Thank you for providing and sharing your analysis here on the EURUSD.

EG

[Summerset]

Originally Posted by Summerset

at 5530, we will contemplate to re-long or short as momentum unfolds, & the resistance at the diagonal's top shows strenght / weakness.

Yr Welcome El Grande.

To assess feasibility in continuation of Holding the position, see attached charts below.

Eurodollar-c, is the 1hr chart, and clearly shows that we have reached the top of the current diagonal. However, this time we have a 2nd buy signal on the hourly, were price has broken above the upper median of the down trending fork marking the 0-1 swing. Note too that at (1) we had negative divergence, were as at (2) price & momentum are in Gear.

So long as we oscillate next week around the central blue median, but do not fall back into the Red fork, we expect to successfully break out of the diagonal, and will hold position keeping stops on 4hr candle close below the Ema-5 based on low of the 4hr close. (This is shown in the Eurodollar-b chart).

Eurodollar-b chart is the 4hr frame, and shows that the buy signal spoken off in the past post has now materialized. Sustaining positive momentum will only be confirmed by break above the central median of the blue fork shown.

finally, on the Eurodollar daily chart, we can see why we can expect an extended correction upwards into 5650-5730.

Here, the central median of the red fork is correcting, and just like with price, were a broken support becomes a resistance, the absolutely minimum correction will be up to the 38.2% AR line shown, to test the past broken support. This will take price to test the broken support at 5650 (marked S), with spikes into 5730 (marked R).

We therefore recommend to liquidate at 5650.

Profitable Trading

[FerruFx]

Thanks Summerset for your analysis.

FerruFx