River Theory Trading Method

[trawlerdude]

I have been reading through this with great interest. Has anyone been following this? I am really intrigued by the whole concept it is helping me.

http://downrivertrader.squarespace.com/eurusd-/

[trawlerdude]

here is a copy of the eurusd tonight



Last week we took profits on our long trade that we held out of 3080. Then late in the week we set up shorts after the FOMC action near the 3386 level for an anticipated countertrend move back to River. At the close on Friday we closed at 3283 just a few points above our River. Many of you may have taken profits on this 100+ point move ahead of the weekend as I recommended to cover your short trade at 3271. I also took profits happily am flat. We have been successful at capturing a good portion of the moves in this p over the last few weeks.

So what is our trading theme heading into this week?

The first thing you should do is review the Price Distribution Analysis for this p. You will see that we are approaching a critical test area near the 3262 level at the bottom of the upper tier value level. I anticipate this will be the catalyst of our next directional move. If this level holds then may trade up to higher levels near 3480. If this level fails then we should begin to move down to test the 3132 area. The idea is to work yourself into position with minimal risk until you have confirmation of the directional move.

I also recommend reviewing the US Dollar Index the Euro Index. You will see that the USD index is about to test a key level at River also which confirms our trading theme.

Understing the theme above what should we do?

Today's River Level is at 3255 confirming the PDA we discussed above this is our focus. I anticipate a test of this level. In my opinion we should err on the side of the longer term trend which is up. Traders should look to set up longs on a push into the 3255 River Level. Risk for this trade will be tricky given the above scenario. Try to be patient let the move work the dem in this level. If you get out too early you can always reset longs if the move up occurs. Upside target is 3353. I recommend that you exit longs here wait for resolution of this area.

If the move goes strongly through the River Level to the downside we can set up shorts looking for a move down to 3132. Obviously the move around this area may be volatile so have your plan ready work either direction that materializes.

If the move up does materialize it has the potential to be powerful. It would not surprise me if this may be the final push up for the Euro in 2007 but let's see what develops if we do in fact go to higher levels.

SHORT TERM NEUTRAL UNTIL RIVER IS RESOLVED

[trawlerdude]

if you notice the trade analysis was right again today. i made antother 80 pips on this. i am really surprised at the accuracy

[trawlerdude]

cut paste today. www.downrivertrader.squarespace.com

he is recommended shorts---dollar strength on almost all the majors
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Bingo! The market traded down to River at 3255 (actual low was 3254) moved to within 8 ticks for our target at 3353. If you followed the recommendation you had as much as 93 points for profit on this trade to work with. All longs should now exit.

Traders can look to establish shorts in front of 3353/3369. I now look for a move back down to River at 3270. I expect a move through River a continued moved down to 3199 then 3128 where all shorts should cover.

What tells me my view is incorrect? Building value settling above 3369 on a daily basis. This should be your risk.

[trawlerdude]

here is the one for cable too.....i missed this entry. can't believe it did move down.

The 9594 dem level we have been focused on prevailed today as the market moved up. Based on price action today you may have covered your short position that was established at 9683 but the market closed at 9690 only 7 pips above this level. If you are short stay short.

Based on today's price action I recommend traders can look to establish new short positions or add to existing short positions ahead of 9707. I expect a move back through the 9594 dem level down to the River Level of 9532. Further I recommend not covering at this level holding for 9340.

What tells me I am wrong? A significant daily close above the 9707 level.

[alex wong]

Originally Posted by trawlerdude

I have been reading through this with great interest. Has anyone been following this? I am really intrigued by the whole concept it is helping me.

http://downrivertrader.squarespace.com/eurusd-/

I following this. 8 p very good Methodology

Alexw

[trawlerdude]

yes alex. today.

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If you are trading along with me you should be short 3353 or better. Once again the market gave us the opportunity to establish shorts in the 3353/69 level. As anticipated the supply at this level sent the market down around 44 ticks today

I continue to to look for a for a move back down to River at 3265. I expect a move through River a continued move down to 3132/3119 where all shorts should cover.

Traders should review the updated Price Distribution Analysis to underst the significance of the move down to our River Level at 3265. If we do not trade through this area continue downward a strong upward move could begin. As your knowledge of my trading style grows you will underst why I am choosing not to cover here as I normally would. I will say that the risk of this level holding is very high you may choose to cover here to lock in profits wait for further direction

What tells me my view is incorrect? Building value settling above 3353/62 on a daily basis. This should be your risk level to manage your current profits.