EURJPY and EURUSD trades taken 12 Aug

Took the EURJPY after seeing it make such a dramatic climb up towards the 136.00 level again.
If 136.00 breaks, there would be very strong momentum upwards.
I saw price holding and consolidating just above the 1hr 20ema, so I took a position with a tight stop and a target a little more than 2:1 risk/reward away.
Took half profit after a while, and the rest eventually hit my final target
That gives me an average of  +62 pips for this trade..or an actual 1.83 risk/reward ratio realised.

The EURUSD trade was taken from the daily charts.
Price found support at 1.4100, formed an Inside bar signalling consolidation.
This is followed by a fake break to the downside, again this indicates buying pressure.
So I set a stop above the high of the Inside bar with a stop under the failed breakdown’s low.
This trade is still open, I’m looking for a longer term trade, targetting 1.4400 area.
Roughly a 2:1 risk/reward.

Looking ahead!

Well, the market’s flying..i’m still waiting for that retracement.
looking for some countertrend trades.. but there’s not a lot to see
maybe can try a quick one on Allgreen, chart attached. some property counters are showing less bullishness now.
The DJIA managed to stay above 9000 with a successful intraday double bottom on the 9000 level itself.
This is a very bullish indication, but note: if 9000 fails, we’ll be seeing a nice big retracement on our side too.
on some of the individual charts, there have been reversal signals..or that some didn’t get the lift needed to break previous resistances.

now looking at next week, because of the recent run up in most counters, I’m waiting for some NR signals for a shortside trade.
Currently nothing looks very good.
But after eyeballing some charts, I found Allgreen interesting.
it’s a counter trend trade, so not very good stoploss and profit target levels, quite a low risk/reward ratio of 1:1 thereabouts. However, price is currently very far away from the moving averages, and the long-tailed doji is a strong reversal signal which happened completely outside of the bollinger bands. So i’m very interested to see how this plays out.

Watch out, I’ll be putting on more articles to fill up the content of this blog, please do come back regularly to check what’s new! =)

P.S. edited this post a little to make it understandable, because i wrote while half asleep..=p

GBPJPY

A little triangle which formed this morning, clearer on the 5min charts.

Explainations on the chart.

I missed this long entry 1-2-3 because I was trying to include the picture for the last post..=.=

My first blog, so I’m still pretty lost and overwhelmed by trying to tie everything together.

Anyway price is already up at the 50% retracement level.

Market Exuberance on the STI

On the daily charts we can see there was a pretty little triangle pattern which made a strong break to the upside.
But do you notice the divergence with volume?
Price is rising on falling volume, this usually indicates weakness in the rally.
(refer to pic for a better idea of the triangle and price-volume divergence)
If today’s candlestick forms a doji, I’d take some profit off the table.
It’s the weekend! Take the money and spend it all!! (well ok, save some as well..)

I was expecting more of a retracement after the break before taking any long entries.
However, it seems that the market exuberance has fuelled yet another monster rally.
Instead of chasing the markets, I am more inclined to be patient and wait for a retracement.
I might miss the lows this time, but it’s perfectly fine!
As a trader, I’m looking to trade movement, be it buy low sell high, or buy high and sell higher. It still produces the same result, profits.
The only difference is in risk management, chasing the market would mean accepting 2 disadvantageous implications.
1) you’ll have a wide stop.
Unless you’re willing to take on a bigger loss, should this trade go wrong, this probably means you’ll take a smaller position size.
2) smaller risk/reward ratio
Regardlss of where you entered the market, the level of the next reasonable target resistance area remains the same.
Therefore by taking a late entry, you’re
a) lengthening your distance to your stoploss
b) shortening your distance to profit
your risk/reward ratio will become more unfavourable.
 
Btw, for the adventurous ones, during this period, you could take advantage of the volatility to do some intraday trading as well.

Be well and trade well!
Ferrowolf

triangle and volume divergence