Technical Templates

[Joe Whitehorse]

I was wondering if anyone has a different view on EurJpy or how you analyzed it this morning.

There's not really much more to analyze other than what you've posted jcp. It's a pretty straightforward pair to critique at current levels.

It's clearly clicked back into trading with a bullish tone from early last week (on the hourlies anyway) & therefore only trading it from the long side should be the primary focus this week, via whichever trigger you choose to utilize.

You've already confirmed it's adhering to the most important aspect when preparing & considering entries (that prices continue to maintain their trending structure at the most recent swing levels), so if you're confident that the immediate higher high & higher low swings (or vice versa for shorts) are being supported then you're good to re-engage.

I agree that usd/jpy is the more attractive trending/pullback candidate, but Yen is taking a beating at the moment so providing you get an appropriate entry & risk criteria for your initial objective you should receive a positive outcome on any of the obvious pairs until the most recent swing gets violated.

[jcpfx]

I've preferred to play Yen via the major (USDJPY) rather than the crosses the past few days. The movement has been way smoother & less jerky, especially this morning again if you compare the pullback action on EURJPY to the shallow continuation benaviour on USDJPY, but that's just my view & preference.

Hey speedbump,

I underlined the main consideration that both passed by our minds Nice to finally see things like you guys

Thanks to Joe as well for stopping by and offering his thoughts

Good luck to all this week!

[jcpfx]

Good Evening all,

a little update from little Italy. Went into this week with a short bias on EurUsd & GbpUsd, and a long bias on UsdJpy & CadJpy. Was watching EurAud & GbpAud as well because we were getting close to a short stance.

Today I was unable to get aboard the EurUsd & GbpUsd moves, even if there were tell-tails. I have started to pay attention to a recurring dynamic that has so far rewarded me for my efforts and I'm bringing it here to openly discuss, as an additional obervation point because it uses common areas that are frequently spoken about here. It's basically a false break of a prior day's high/low in line with the trend.

Look at EurUsd today: from 7 to 8 am CET we closed above yesterday's high. The next candle holds above and tests the level from above. An area has been created, in the 2870s, that I am looking for price to close back below on a 1H chart in order for the breakout players to be caught on the wrong foot and be forced to liquidate. The candle from 11 am to 12 pm CET was the decisive candle that, if broken to the downside, would give me an entry.


EurUsd 1H chart


I had a great week during the beginning of June where price would break, test, form a 1H 1-2-3 and break back down and that made it even easier to play. I have hence been studying the effects when price closes back in a more subtle way, and am still in the process of monitoring the results, the % win, the average R:R on these setups but to me it's looking good. I hope you find it amusing, because I thik it may compliment the "main" pro-trend setups shown in here.

To speak of the mainstream pro-trend setups, I took a long entry on CadJpy today, getting out with almost a 1:1 R:R after the day's highs diddn't hold. Did anyone else see it/play it?



CadJpy 5Min showing the entry after the pullback.

Going into tomorrow, I am definitely bearish on EurAud & GbpAud. any thoughts there?

Thanks and good luck to all!

[strobe]

I have started to pay attention to a recurring dynamic that has so far rewarded me for my efforts and I'm bringing it here to openly discuss because it uses common areas that are frequently spoken about here. It's basically a false break of a prior day's high/low in line with the trend.

That's right, a break up through a significant high such as a prior session, day or week wouldn't qualify as a long trade purely because the current primary trend on that pair is bearish, therefore only short set ups are considered.
So you're correct in ignoring any long set up opportunities (however tempting) in favour of shorts.

To speak of the mainstream pro-trend setups, I took a long entry on CadJpy today, getting out with almost a 1:1 R:R after the day's highs diddn't hold.
Did anyone else see it/play it?

I didn't play it, but it's one of a few currently valid trending set ups playing out.
I've been trading a combination of eurusd, gbpusd, usdjpy & usdchf the past few weeks, whichever happens to offer up the cleanest triggers on the day.
No need to look outside of those lately to be honest.

[hawkmoon]

I have started to pay attention to a recurring dynamic that has so far rewarded me for my efforts.It's basically a false break of a prior day's high/low in line with the trend.

strobe has actually stolen my thunder & posted more or less what I was planning to say.
I wouldn't mind betting that type of set up traps & fakes out a lot of blind breakout players who don't pay sufficient attention to the kind of background structure we consistently bang on about on here time & time again.

The first rule of this whole model is to only trigger entries when they're in sync with the dominant primary trend.
If it looks scrappy or it's not quite clicking into gear then wait until all the pieces are in place before executing......& while you're waiting, focus attention elsewhere to pairs that are moving in tandem on the primary/secondary timeframes!

[round number]

Went into this week with a short bias on EurUsd & GbpUsd, and a long bias on UsdJpy & CadJpy.
Was watching EurAud & GbpAud as well because we were getting close to a short stance.

I don’t disagree with any of those directional biases. As strobe say's, there are quite a few pairs offering continuation directional trades again this week.

As well as the ones you've highlighted the Canadian Dollar is strong v/s Euro, Sterling & the Swiss Franc, moving cleanly through prior hourly swing high levels, & Kiwi is also currently very bullish v/s Yen, Sterling & Euro. So take your pick of the high quality opportunities on offer.
It's often the case with this type of model where we're either patiently sitting on hands doing nothing or juggling a plethora of high quality opportunities.

Such is life!

[jcpfx]

Thanks guys for the reinforcement of those common sense lessons

Later today I'll post a few examples of the false breakout (FBO) so you can see how i've been using the same information that has always been on here to develop a "fade style" setup. Actually, Cad Jpy may offer a FBO long setup today if we can close on the 1H above 95.40...

In the meantime, my focus has shifted to EurCad shorts today (no trigger yet, the 1H still has to kick back into a short bias) and GbpAud shorts (looks better than EurAud from what I can tell) with a stop entry below the o/n low at 6140 with a stop at 6220, looking for those usual 200 pips that it's covering nowadays.
I have refrained from playing Kiwi crosses as my broker gets too expensive with 5+ pips spread.

Good luck going into NY

[jcpfx]

And here are some FBO setups from recent price action:








Any thoughts would be appreciated!

Good luck going into the FOMC

[2Taps]

And here are some FBO setups from recent price action:
Any thoughts would be appreciated!

There's not really much more to add other than what strobe & hawkmoon have already covered jcp.
If the results of your testing & recording determine it's a valid play whenever price breaks & fades back in line with the current dominant trend then as long as the reward justifies the risk in those scenarios you can add it as another set up.

Summer doldrums are beginning to have an effect on one or two of the crosses already & will impact the majors as we drift into August, so a little more care will need to be employed over the following 4-6 weeks.

[jcpfx]

Hey 2Taps,

yeah, the summer doldrums are starting to show. But there are some good looking pairs that have my attention going into the week. In particular, I'd like to mention:

AudCad to the downside

EurAud to the upside

NzdCad to the downside

Bund to the upside, even if we are very close to multiple resistances and therefore FBOs may present themselves before trend opportunities.

Maybe an intraday punt on Cable to the downside but nowhere near as clear as the others.

False breakout setups possible on other majors. Aussie still interesting even if we closed friday above the recent lows and thus we have a FBO that may halt proceedings for now.

Regarding the FBO setup, I have compiled some statistics...

I looked at 2 versions of the FBO across the Majors:

1) Pro-Trend: price closes below yesterday's low (in an uptrend) or above yesterday's high (in a downtrend) on the 1H chart, and then during the day closes back on the other side. Entry upon 1H candle close, stop above the high/low created during the false break, and consider trade success with at least 1:1 RR.

Statistics since start of 2013 give this anywhere from 61.5% (Cable) to 88% (UsdJpy) %Win. EurUsd is 71%.

2) Counter trend, only if we get a false break of a swing high/low from the daily chart. Rules are the same, except that we are considering the break of the swing high/low and not yesterday's range. Success rate goes from 61,5% (UsdJpy) to 80% (AudUsd) in 2013.

I have added the setup to my arsenal and will keep you posted

Good luck going into the week!