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Everything posted by Mercury

  1. Hi ramji, In order to help, which I'm happy to do, why don't you tell us how you decide on a trade including the following factors: How much to trade - size of position? Which vechicle (Spreadbetting or CFDs or other)? What makes you go in at a particular point? Where you place stops? How you identify a target exit? How you manage the trade in flight? Cheers, M
  2. Update on USDJPY: Well as I suspected we got a bounce off the lower triangle so now it looks like another hit on the upper is on the cards. The market could drop before then so a confirmed break of the lower triangle line would be a Short signal. Maybe FOMC will be the clarifying trigger for this market. I was stopped out for no loss on one position and took a 50 pip profit on the other, which I will reinvest into another short at either a touch on the upper triangle line or a break of the lower one. If anyone else is trading this market I'd love to hear your views! Here is the chart: 
  3. I never really use the monthly, the danger is you lose too much movement detail. I start with the weekly but in this case it shows the same thing and I agree with you on the potential A-B-C big picture. In reality I think it doesn't much matter whether it was a series of 1-5s or a big A-B-C as it all comes to the same point with the end of the current 1-5 wave down (which could be a Wc too). The trick with EW for me is not to get too obsessed with perfection as there are always at least 2 options. That is why I use other methods together with EW to try and hone in on the one I feel has the max probability of being right. EW alone is too dangerous and open to too much confirmation bias risk. My big picture on Oil (corroborated with my analysis on Shell - see separate post), si that we have yet to see the bottom. On the weekly (see below) could my big wave 3-4 (purple labels) move down to where I have the pink 3-4? Does it matter? We have a break of the upper tram, which is bullish, and positive momentum divergence BUT on the daily we have Neg Mom Div developing and have not yet seen a significant Pos Mom Div to indicate a major trend reversal. On the weekly we are also approaching a Stochastic high, not quite there yet. Taken all together my current view is we are in a relief rally (A-B-C correction - with A completed). Thus I forecast a Wb down Wc up to a suitable Fib retrace line (TBD) and then a final leg down to perhaps $20? Of course we could have seen the bottom as some are suggesting but as a contrarian I see the mainstream media comments on oil stabilising as preparation for another drop. MSM never gets it right as they react to the market rather than preceding it. Will be an interesting ride. My strategy is to swing trade this one, I am currently short at the Wa turn (Brent and Shell), will exit at a suitable Fib and seek a reversal to catch the Wc. Stop protected now so looking ok. here is the chart: 
  4. Momentum 12 Stochastic 14, 3, 5 RSI 14 I think these are the standard settings for the RealTimePro charting package, though IG regular charting uses Stochastic 5,3,3 I think? Anyway these setting are the ones used by the guy I learned technical analysis from and the main point is it doesn't much matter so long as you have built up the experience of interpreting what they are showing. There is no indicator that is foolproof at any setting and no single indicator that is always "right" so I use a number of them together with other methods to maximise my probability of being right. I trade stock indices (some individual stocks); Oil. Gold, some FX crosses (mostly only XUSD). Hope that helps.
  5. Trade no, I see no justification for trading off the calendar but perhaps your question is more around so called fundamentals vs technical analysis based trading (see post on this topic elsewhere). Very often actual news/data releases produce the opposite price action to the intuitive one. There are various theories for this but one I subscribe to is that the main market movers have already priced in what they think the data will say and often they over do it, hence the counter intuitive movement. In addition we are in a period where bad news on the economy has been good news for financial markets as marker movers think this leads to more central bank stimulus. I think we may be reaching the end of the road for this though. The one thing you do need to watch out for is volatility around economic calendar releases and those counter intuitive reversals. I tend to avoid trading in proximity to major releases such as FOMC, ECB, BoJ and non farms. Interestingly BoE super Thursday has been a bit of a non event of late a they don't do much but sit on their hands and pontificate. Also watch out for individual company reporting and dividend declaration if you are using you CFDs for share trading rather than indices. If you are trading indices you should really be on the spreadbetting platform.
  6. JB, Watch out for the EURUSD, if you are going for a short term long ok but as you mentioned the FOMC is likely to impact volatility tonight and as I outlined in my post I am stalking this one for a serious medium term short. On a related cross a trade I took this morning was EURGBP short at 7862. The rational, as illustrated on the charts below, is that long term we may have had a classic A-B-C retrace (or a 1-3 of 5 EWs) don't know which yet but under either scenario it should drop now. Price has touched and rebounded of the 76% Fib and there is significant Negative Momentum Divergence on both Daily and hourly charts. Additionally both Stochastic and RSI are high but have come down vs the previous high. On the daily chart you can see some quite nice tramlines with a kiss on the underside of the long term line on 25 Feb and another on the bottom of the triangle this morning. These are very bearish signals taken all together and drive me towards the A-B-C scenario, which would be a big move down. Also if you look at EURUSD and GBPUSD I think both will go up in the short term but the GBP more strongly before both drop but the EUR further in the medium term, all of shich supports a decent drop in the EURGBP. This is active right now so check it out and let me know what you think. Here are some charts: 
  7. Agreed but my point is that using fundamentals to judge trading is not profitable because common sense doesn't prevail. In the recent past bad news on the economy was good news for stocks because everyone thought it meant central bankers would interfer more, and they did. But the common sense signal would have been, "economy not going well - stocks should go down" but they didn't. Now maybe we are seeing traders get it, that things are out of whack and bad news is bad news again, unless central banks go crazy. I don't think they have much left in the locker that wouldn't spook people as it happens. Look at Japan225, which dropped like a stone when the BoJ announced negative interest rates. Look at the Euro's response to Draghi last week, it shot up rather than down on interest rate reduction. Granted it is likely to fall soon but still I get that from the technical analysis rather than fundamentals. Take Oil for instance, the prevailing wisdom is that Oil is cheap, cheap, cheap but I bet it goes down to a new low before it gets into a bull market. Fundamentals don't drive the market, sentiment does and technical analysis aims ti track sentiment, hence my point is forget about fundamentals and focus on technical analysis to assess sentiment and like price movement as a result.
  8. Traders seem to flock to the Yen when stocks are under pressure and certainly the USDJPY cross has been closely mirroring the main indices for some time. The daily chart for this cross tells me that price action has completed a wave 3 down and is in a relief rally to a wave 4 but this is contained in a triangle with 5 clear touches and a recent break below the bottom line. The question is whether it will now bounce up for another cycle, of even break the triangle to complete a clear A-B-C or carry on down to complete the wave 5? Whenever it does break down I have 2 targets for the end of the move: the first a weekly chart tramline at about 11000 and the second is the weekly fib 38% off the June 2015 high (10670ish). When it does reach the end of this wave we can expect a significant retrace rally. Does this mean a drop and then strong rally in stocks and Oil? probably to a higher high than where we are presently before a big drop in all of them? I think so but the challenge is to time the entries as always. here are the charts: 
  9. I believe there is no time limit except for certain futures contracts like Oil where the contract period has a set close point. If you trade DFB that is not an issue. The only issue with holding trades for a long period is there is a financing cost to holding them . In addition if your positon is short on stocks or indices you will be hit negatively by dividends. So you need to make sure you re holding for a strong move. if you are not sure then you need to swing trade each wave up and down. When you enter a trade you need a good rational for why your are entering at that point and a target exit already worked out via your analysis. If you don't do this you have no road map for your trade and are likely to miss profit taking opportunities and probably take losses instead of profits.
  10. I met someone recently who told me he uses common sense when trading and investing. On further discussion it seemed he was using fundamentals, sort of... The one thing that struck me about this is that common sense seems quite absent in the markets, at least of late (and by that I mean the past 6 or 7 years and perhaps longer than that). I'm not sure if there ever was good old days when investing in a company was all about a decent dividend return and some growth rather than pure speculation but now it is firmly the latter in my view. How can fundamentals help decision making when you have the following to contend with: management share buybacks fueled by cheap loans to hit EPS targets and max bonuses rather than investing for growth commodity bull market underpined by China where data releases have to be treated with a large pinch of salt and who knows what is really happening in China anyway a surge in Chinese participation in the stock market, they are gamblers by nature... Tech bubble that dwarf the 2000 one, just check out the FANG or BAGLE companies (come commentators were trying to argue that Amazon was a good buy at a PE of 500!!! Central banks trying to drive an arbitary 2% inflation when wages are nowhere near growing sufficiently to sustain this and many have had a pay freeze for some years Central banks meddling with a supposedly free market with QE and zero interest rates or negative... I'm sure there are many more issues to add to that list but you get the idea. In such a situation the only thing I can use to make sense of it all is technical analysis. Elliot Waves; Fibonacci lines; tramlines; momentum divergence etc applied across multiple markets paints a clear picture for me which is that the main stock markets are heading for a big fall, maybe an unprecedented one... Commoditied have not yet hit bottom and are currently in a relief rally only. When they turn down again (especially Oil) the whole house of cards will collapse. The only sensible trading strategy is to use technical analysis to identify shorting opportunities (long on gold). Interested to hear if anyone sees it differently and why. Adrian
  11. JB, Did you get stopped out by the Draghi effect on this one? I was long from the previous week at about 10850 but I get nervous at central banker announcement time and so cashed in at the completion of my Wave A (see hourly chart below). I was hoping to get back in at Wave B but the move was too fast. Now looking for a final leg up to complete Wave C and take a short to a final drop. If that all works then sometime this week the price should hit around the 11250 mark (that's the 62%Fib from the Aug 2015 Wave 4 high) and then drop to, well who know how far it will drop? Beyond 10500, maybe as far as parity. That would be a nice 1250 points. Here are the charts: 
  12. I am long USDCAD at 13201 (13375 as I write). I am unsure as to whether we have seen the top of this market or not. At a minimum I expect this rally to get to the Fib 50% (13930ish). That's 700 points for those doing the maths. However, if I am right about Oil (see post on Shell as a proxy for Oil) then maybe we have yet to see the high on USDCAD (it moves in opposition to Oil as I'm sure you all know). In that case I'm targeting in excess of 14700. There will be plenty of swings between now and then for sure but I'll be waiting for the next pullback to add to the first position and then do a split bet strategy (cash one at the Fib retrace and hold one longer to see what happens). Oh and I'm stop protected at break even so no loss potential at all on this one. Here is the daily chart for visual ref: 
  13. Oil is a difficult market to trade given the players involved, it can be spiky and fast moving and therefore hard to predict and easy to get stopped out of unless you use very wide margins of error. I like to use Shell as a proxy for Oil because although it is moved by Oil it behaves more like a company share, naturally enough. On both Oil and Shell my analysis suggests we have not yet reached the bottom and the recent mainstream media suggestions that we have only reinforces my view on this (being a contrarian trader!). Using the Shell A weekly chart (below) I have plotted the Elliot Waves to a completed Wave 3 of 5 down and now in a Wave 4 counter trend rally, I believe we are at the turning point of the A-B-C rally (Wave A completed at just above the Fib 38% - blue Fib) and are now due a drop to the Fib 50%/62% (red Fib). After that Oil should complete the A-B-C with a 1-5 up on the hourly chart and again I'll be looking for Blue Fib 50/62% to see the end of this rally before the final drop towards the all time lows or beyond? To pin point these turns more accurately I will move to the Daily and hourly charts but the weekly maps out the medium term route for oil. I am short Shell at 1680 and will swing trade to catch the next rally up before taking longer term shorts to the bottom. Look forward to views, especially contrary ones! Adrian 
  14. Hello again Welshman, From my previous post ont he FTSE100 you will know that I use EW extensively as part of my trading methodology. I find it vital to assessing where the market is at in its cycle. I start with the Weekly charts to get the long term position and then hone into the hourly to trade. There is always at least two alternatives to contend with so it is a process of constant evolution and re analysing for new price action information. Using your gold example I have the same count as you but also an alternative. Everytime we start a new move it could be either a 1-5 motive wave OR an A-B-C counter trend rally and we won't know until Wc or W3 is complete and then the next move will tell the tale. However it doesn't much matter until then as the opportunities are the same. In gold I see either an Wave A/1 completed moving down to a W B/2 OR this is a Wave 3-4 move with a further Wave 5 to go to get up to a Weekly chart Wave A. Note that there is a strong Negative Momentum Divergence and Stochastic is dropping, which is indicative of a significant retrace. When these bottom out and if they coincide with a Fib resistance line then that will be a good place to go long. On the hourly I foresee a lot of up and down noise in the short term with another pop up to $1290iish quite possible before the Wave B or 4 gets going. At this stage what is important is that gold is set to drop and the Fib tool can help us pin point where it will turn back up. Long term gold is going up in my view so I only want to add ot my long positions until I see a major turn. I'm targeting the $1400 area for that major turn and looking at the Fib 50% or 62% to get in long having already got long and holding at $1080. Here is the chart: 
  15. Hello all, I have recently joined the forum but have been trading for over 2 years. I use the following to triangulate trade entries: Tramline (TL) pairs that show lines of resistance and support along a trend - if a trend is applicable – also triangle formations and head & shoulder necklines where relevant Fibonacci (Fib) retrace lines - especially on counter trend rally/pullback – and particularly look for intersection of Fib lines and TL lines as high likelihood turning points. Fib 50% and 62% are the usual turning points but in some markets at certain times 76% and even 82% can come into play (e.g. Dow Jones of late) Elliott Wave (EW) counts - 1-5 on motive waves with the main trend and 1-3 (or A-B-C) of counter trend moves (see labels on charts attached) In addition I use Momentum, Stochastic and RSI to support the first 3 methods in identifying turning points – especially seeking so-called divergences (lower price but higher momentum is a positive divergence and the reverse is negative) Overall I seek to identify turning points, often contrarian in stance, using the above plus Commitment of Traders data where relevant. I also look at 3 levels of price data starting with Weekly then Daily and finally Hourly. Occasionally I use 15mins if I really need to hone in and clarify the Hourly chart but this is more risky in my experience. I either take long term positions seeking to ride a long bull or bear run or swing trade the waves, depending on the circumstances. I use to day trade on the 5mins but couldn’t make that work so am taking the bigger picture long term view no with more success (i.e. making money instead of loosing...) I trade main stock indices; major currency pairs; Brent Crude; Gold and some individual FTSE100 shares (e.g. Shell as a proxy for oil and Rio/BHP as a proxy for metals etc) Here is an example chart using the S&P Daily. Here I assess we are clearly in a Bear with quite a long way down yet to go. Of course there is a chance that we could see a new all time high so one has to keep stops in place to guard against that. Short term I think we are in a counter trend rally, albeit a strong one, and should get a turn this week. After that we may either be at the beginning of the long drop or see one more push up to hit the Fib 76% mark before the big drop. The Fib 62% didn't hold but ont he Hourly chart I see good short signals, worth a bet with a tight stop. As I said after that it depends on which scenario plays out as to whether that would be a short term trade of a long term hold for the big drop. With a stop in place at break even I am in good shape as if it does come back to the 76% I get another chance at no cost. 
  16. I tend to watch Brent Crude as the overall global oil barometer but it should be similar to US Crude. Just to let you know I use Tramline, Fibonacci, Elliot Wave count and Momentum indicators as the backbone of my analytical method. Right now I think we are in a counter trend rally that will retrace at least to Fib 50% of the recent move down to the Jan lows of $27.40. After that I think we see another final leg down to complete the overall drop and then the bull will reemeerge. Of course the Jan lows could be the bottom but time will tell. For the immediate time period I thing we are seeing a small retrace back down before a final push up to the 50% retrace. I expect to see a drop to about the $36 mark before that final push up. All subject to change of course as the market unfolds but I am seeking to go long at about $36 and then to reverse at about $47/8. 
  17. Ok thanks Welshman, Let's give it a go (though it might be hard to view them on the post, it would be better as an attachment) As a new member I will first outline my analytical method as this will be necessary to follow my chart analysis. I use the following to triangulate trade entries: Tramline (TL) pairs that show lines of resistance and support along a trend - if a trend is applicable – also triangle formations and head & shoulder necklines where relevant Fibonacci (Fib) retrace lines - especially on counter trend rally/pullback – and particularly look for intersection of Fib lines and TL lines as high likelihood turning points. Fib 50% and 62% are the usual turning points but in some markets at certain times 76% and even 82% can come into play (e.g. Dow Jones of late) Elliott Wave (EW) counts - 1-5 on motive waves with the main trend and 1-3 (or A-B-C) of counter trend moves (see labels on charts attached) In addition I use Momentum, Stochastic and RSI to support the first 3 methods in identifying turning points – especially seeking so-called divergences (lower price but higher momentum is a positive divergence and the reverse is negative) Overall I seek to identify turning points, often contrarian in stance, using the above plus Commitment of Traders data where relevant. I also look at 3 levels of price data starting with Weekly then Daily and finally Hourly. Occasionally I use 15mins if I really need to hone in and clarify the Hourly chart but this is more risky in my experience. As to the FTSE, my current view is that the bull market is over (was over last May 2015) and the bear has begun but is only in the beginning stages. Under EW theory the FTSE has completed the first of 3 major waves down and in addition has also completed the first of the third major wave (which is also composed of a 1-5 wave count). We are now in a retrace off the recent low hitting in the region of the 62%/76% Fib resistance levels. If these hold as resistance then the next leg down is due soon and it will be a big one! On the weekly chart you can see the whole of the move up from the 2009 lows, which describes an A-B-C retrace pattern to the May 2015 high (Purple labels). If this is correct then the most likely next major move is a 1-5 motive wave down, which we have had the first leg of and have commenced the third (Wave 2 being a counter trend rally back up). If true the bear could take us below the 2009 lows. On the Daily chart you can see the first drop (Purple 1) and counter rally (Purple 2), which poked above the 62% Fib and then turned back down to complete wave 1 of wave 3 (Pink 1). We are now in a retrace of that move with positive momentum divergence (see green line on momentum indicator) at Pink 1 supporting a strong rally. Is that rally now running out of steam? Currently the FTSE is showing negative momentum divergence building (but is it completed yet?), high Stochastic and high RSI. There is also resistance on the red downward tramline but price is in between the Fib 62% and 76% lines (not ideal, would prefer it to have nit one or the other and stuck). However the shape and strength of the rally suggest it is running out of steam and will either turn now or hit the 76% Fib and turn then (I expect this will resolve this week, maybe after the FOMC rate announcement on Wednesday). Zooming in to the Hourly chart I see two possible scenarios: the rally finished Mar 5/6 and will now drop in an A-B wave before a final rally back up to the 76% or thereabouts before the big drop, OR the rally has one more leg up to go to complete an A-B-C counter trend move and then the big drop will begin. In either scenario there will be a sharp drop in the near future followed by a strong retrace (or further leg beyond recent highs) before the main drop will begin in earnest. There have been a series of Neg Mom Divs in this rally but notably this time there is also a significant Neg Div on Stochastic. My trading strategy in this is to take a position short the FTSE100 with a stop above the recent high and if I get stopped out try again near the 76% Fib level, assuming no major change. After that I will need to reassess to try and decide which of my 2 scenarios is in play and act accordingly. Note I also compare the other major indices (S&P500, Dow, Dax, Japan225 and Russell2000) and I see a similar picture. I think the US markets are the ones to watch to try and mark the final turning point. In addition I see Oil as being a major market driver at present and Gold as a resultant market in fight to and from safety so check these two to try and confirm my hypothesis. Sorry if that is all quite ling winded but I am not sure if others use EW, Fibs, TLs and Mom Divs in this way. Basically I am targeting the red circle area for a short and the Green for a long. Look forward to your comments (positive and negative). AR 
  18. Luke, I can post analysis on the FTSE today if you can tell me how to attach chart picture files? I use the ProRealTime tool, charts save as a PNG image. Regards, AR
  19. Hello Dan and everyone in the IG community, I have recently been invited to join so am simply introducing myself with this post. I am a member of a few other forums but find them typically less than useful for a number of reasons including: Infrequent posting by members, with most preferring to observe from the sidelines rather than get involved Use of the forum as a chat room to socialise personal triumphs rather than to exchange ideas and views Posting to stoke ones own ego by trying to dominate the exchange, including offering unsolicited advice to big oneself up I am interested in open and honest exchanging of ideas about trades, the markets in general, and observations about what is, or may be, moving the markets (including politics, the ecomony, policy etc). I am interested in how people assess the markets to enter and exit trades and how they manage live trades and their account in terms of risk. The markets I tend to trade, in order of focus, are: Main stock indices (FTSE100; S&P500; Dow; Dax and occasionally Russell 2000 and Japan225) Certain FTSE stocks from time to time Gold Brent Crude GBP/USD, EUR/USD USD/JPY, USD/CAD, AUD/USD Ocassionally High Grade Copper Look forward to a productive and lively interaction. Adrian