Technical Templates

[jack mason]

Swiss, $US & Cad are early laggers this morning according to interbank volumes, with Kiwi, Euro & Aussie churning over acceptable numbers into the Tokyo/Europe overlap.

Obviously the Australasian action will be high on the agenda today on the back of the Aussie rates data, so those were certainly the focus currencies during Asia.
EUR/USD is a solid buy on dips, evidenced by the clean cyclical sequence on the sub-hourlies above the key S&R zone @ 1.30 & that should pull the other risk currencies along with it for the time being.

[JimmyMac]

EUR/USD is a solid buy on dips, evidenced by the clean cyclical sequence on the sub-hourlies above the key S&R zone @ 1.30 & that should pull the other risk currencies along with it for the time being.

and will be aided by Asian CB's buying (exchanging & laying) too in order to rebalance their end of year baskets.
they've been very active overnight in Tokyo & are still in evidence today....probably now right up into the London fix.

[Sarah Foster]

Which explains the aggressive bullish price action in Kiwi & Aussie this week.
Are their footprints visible on the network Jim? or do you guys get wind of that type of activity via other sources?

Very handy info to be aware of, especially when markets are quiet & certain currencies are locked inside pre-breakout ranges.

[jjay]

Are their footprints visible on the network Jim? or do you guys get wind of that type of activity via other sources?
Very handy info to be aware of, especially when markets are quiet & certain currencies are locked inside pre-breakout ranges.

We have a couple guys here who have worked at 2 of the main interbank brokers we use so they get to know relevant bits & pieces related to large transactional flows being worked & filled.
+ those dealers are well versed in the behavior traits of specific clients who are consistently on the "right side of the market" of the particular currencies they trade in & out of. They also share info with other dealing desks. It doesn't take too long for word to get around if anything juicy is setting up.

Most of us have also worked in dealing rooms at various banks & funds all over the shop, & you build up a network of reliable contacts along the way.

Tess & Jocelyn's parents & uncles are especially well connected having held VP & other senior management roles at the big tier 1 investment banks both at home in the States, & overseas in Europe & Asia, so their fingers are deep into a lot of tasty industry pies.
It all helps to keep the wheels greased & spinning freely.

The trading world is no different to any other high rolling business enterprise in as much as often it's not what you know, but who you know.....& never has that been more apt than when dealing with money

[Eidriel]

Hello guys!

I just went through the pairs, and to me there only seem to be 1 high probability trade to take on, which is shorting EUR/NZD with a target at the 1.5500 area. What do you guys think about this? Would this be considered a high probability trade to you all?

I understand the emphasis on taking ONLY the high probability trades, and I would love to do that (I believe I have the discipline to keep to that rule) but the problem is, sometimes I am unsure if a particular trade would be considered high probability, maybe it would be for me but not others. It can also be the other way round, I may miss out on high probability trades that people pick, which I do not think is high probability because of my lack of experience.

With that being said, which other pairs at their current level would you all consider "high probability" so I can take a look at their charts to see what you all view as high probability? Because I only see EUR/NZD as a higher probability trade but I may be wrong.

And also, what do you all think on going long with this CADCHF pair? This one, I am not too sure if going long is considered high probability. I have attached the CADCHF chart with upside levels.

Thanks

[Joe Whitehorse]

I just went through the pairs, and to me there only seem to be 1 high probability trade to take on, which is shorting EUR/NZD with a target at the 1.5500 area.
Would this be considered a high probability trade to you all?

I understand the emphasis on taking ONLY the high probability trades, and I would love to do that (I believe I have the discipline to keep to that rule) but the problem is, sometimes I am unsure if a particular trade would be considered high probability, maybe it would be for me but not others.

I'm not trying to be evasive & I will give you my opinion (for what it's worth) on what i consider are currently higher prob bets, but first I'm going to spin the question around & ask you to tell me/us to succinctly summarize the few key structural points or priorities we use to determine/filter a typically potentially higher probability opportunity.

The framework is a dynamic & solid template that can be used from as close as a 5 minute chart, right out to a monthly chart & it's devised & presented that way precisely for that reason.

[Eidriel]

Hello Joe

Thanks for the reply!

Alright the way I filtered out that 2 pairs which I mentioned:

1. Determine the current directional bias for the pair.
- I do this with the help of the 60 SMA on the 4H and the 1H. Lets take EURNZD as an example. On the 4H, the 60SMA has been going up and up, but then because of the recent huge dip down, the 60 SMA has now just started to point down, with price also below the 60 SMA. On the 1H, Its clear, SMA is going down, and price is way below the 60 SMA.
- In addition to that, we also see price breaking through key round numbers with strength like 1.5800, 1.5700, and 1.5600. So this adds more confidence into going short with this pair?

2. Determine a time to enter the trade
- Now seems to be a perfect opportunity to go short as price has just pulled back to 1.5600. I am just waiting on the 15M for a 123 signal, or rather a lower high lower low cycle to enter.

3. ADR
- and of course the ADR still show plenty of room downside for this pair.

This is the way I analyze the EURNZD pair, and also the same thing applies to the CADCHF pair I mentioned, and these are the skills which I have picked up from the thread. I would think the criteria that I mentioned above would signify for a "high probability" trade. But then again like I said, I am still not too sure, because of the lack of experience.

My biggest criteria for entry would probably be a pullback to a round number AND preferably a key level like S/R zones and prior session/day high low. Unfortunately, there are quite often times where these KEY levels do not seem to coincide with round numbers, and of course the other way round is true, round numbers that do not seem to coincide with any KEY S/R zones. So when I see price pulling back to a S/R zone that is NOT a round number, or price pulling back to a round number that is NOT a clearly identified S/R zone, I get confused. Would this now be a high probability trade to enter?

I hope you understand my train of thought. Cheers!!

[Joe Whitehorse]

Alright the way I filtered out that 2 pairs which I mentioned:
1. Determine the current directional bias for the pair.
- In addition to that, we also see price breaking through key round numbers with strength like 1.5800, 1.5700, and 1.5600. So this adds more confidence into going short with this pair?
2. Determine a time to enter the trade
3. ADR
- and of course the ADR still show plenty of room downside for this pair.

This is the way I analyze the EURNZD pair, and also the same thing applies to the CADCHF pair I mentioned, and these are the skills which I have picked up from the thread.

OK, so there's nothing wrong or amiss with your identification process & that basic, succinct framework will have you facing the right way in order to begin filtering your potential entries.

My biggest criteria for entry would probably be a pullback to a round number AND preferably a key level like S/R zones and prior session/day high low. Unfortunately, there are quite often times where these KEY levels do not seem to coincide with round numbers, and of course the other way round is true, round numbers that do not seem to coincide with any KEY S/R zones.

Don't get too hung up on trying to match round numbers with clearly identifiable support & resistance zones.

Remember, we're not in the business of looking for perfection.
In this world, that scenario doesn't exist. The best we can do with the available information at any specific time is to try stack the odds in our favor as much as possible.
If we waited for every opportunity to fit snugly into place with all of our required criteria we'd never pull the trigger on anything.

If a round number and/or a prior day or week high-low coincide then fantastic, it adds a greater degree of confluence to the area, but it's not a deal breaker if they don't.
Providing there's evidence of a previously noticeable reaction to a particular zone, and/or price is honoring a clearly visible cyclical move, that's good enough to pull the trigger providing you can determine acceptable risk.

It's far more important that the cycle sequence (higher highs & lows....lower highs & lows) is prominent heading into or out of a prior zone of conflict than it is to have a round number kissing a S&R zone.

So, given your identification process is clear & solid & your set up/trigger criteria makes sense, + you're more than comfortable with your risk & forward profit potential.....do you really need me or anyone else to confirm what does or doesn't qualify as a high(er) probability set up scenario??

[kipper]

I just went through the pairs, and to me there only seem to be 1 high probability trade to take on, which is shorting EUR/NZD with a target at the 1.5500 area. What do you guys think about this?

This type of damp & sour outlook won't do your bearish Euro outlook any harm Eidriel.
http://www.bloomberg.com/news/2012-12-0 ... -4-on.html

Earthquake (& possible tsunami warning) in Tokyo just now will also have cause ripples in the Yen across the immediate regional trading sessions too if the situation deteriorates any further today.

[midgely88]

I just went through the pairs, and to me there only seem to be 1 high probability trade to take on, which is shorting EUR/NZD with a target at the 1.5500 area.
And also, what do you all think on going long with this CADCHF pair?

Drinks are on you tonight Eidriel if you decided to leg into either or both of those two bias oriented pairs today!
NFP just injected a secondary turbo boost into them, especially the CADCHF bet!