I have decided that its time for me to start my journal and expose my musings to the rest of the board. While I totally agree with Vahids post that a journal is essential I am not convinced that a public discussion forum is the best place for it.
I'm fine with sharing my thoughts and opinions and maybe posting some trades as I make them but I would be concerned about having too much personal info on line.

I will initially be using this thread as somewhere to post my thoughts on what the charts are telling me and where I think they may go next. I may suggest setups here but not trade them, and trade setups that I have not mentioned.

I will also post the results of trades that I make based on my own analysis - not those that Vahid or others recommend.

Please feel free to comment (gently) on my posts but use your own analysis for trading mine might bankrupt you

Michael

I look forward to reading it Michael

Bravo Michael! You're starting to tread in the deep waters. I'll be watching.

Vincent

Thanks guys, your encouragement means a lot

The first thing I've realised is that I have to do this before reading the other posts with analysis in them, otherwise I'll just see what has been pointed out to me by others rather than what I see for myself.

I've decided to have a good look at USDJPY first. I refer to the 88.4 area several times. The line on the chart is at 88.376 but I don't use this figure as it implies accuracy of a level rather than a band in the 88.4 area.

After a long downtrend in which the Dollar has fallen by almost 1/3 against the Yen there was a sharp fall three weeks ago as the price reached the 88.4 area. This was strong support a year ago and again in October of this year. The following week the price recovered and last week it closed at just above 89 with a long tail.
The two key points for me here are the positive reaction to this support area and the positive MACD and RSI divergences which have formed.
The next few weeks should see a more convincing break down of the support or a break up through one or both resistance lines. If it goes up then 100 should present significant resistance as it has been support and resistance in the past as well as being a very round number.


Looking at this support on the daily we can see that when it was breached there was a sharp fall ending with a Doji candlestick before the pair rose for four consecutive days. Last weeks dip then recovery also seemed to be around the 88.4 area.
There is also a recent positive MACD divergence on the daily.


Finally the four hour chart. Again we can see the indecision around the 88.4 area but there is also the support and resistance lines which could be said to form a triangle. My expectation is that we will see a fall back to the 88.4 area soon after opening. If it continues to fall and closes below the support line shown then 87.7 and 86.6 seem like likely target areas.

If it breaches the resistance line then 90 has been a significant support and resistance in the past, and is also about where the upper Bollinger band will be on the daily.
As far as trading this is concerned I could be convinced either way so will keep an eye on the charts and not commit myself unless I am sure.

If you have ever wondered about the validity of chart patterns look at this pair on the monthly since 1990. That peak and the three since then are as close as you will ever get a trend line to draw. Spooky

All the best

Michael

Interesting stuff Michael,

Yes, it does make sense to make our own posts before looking at each others', but sometimes they are bound to overlap. After all, we all have the same teacher.
One suggestion re your charts, not everyone will know the EMA cross that you are using, so it may be an idea to place a small label with the info to the left of the chart.

I would certainly hope they overlap, otherwise it would mean that I've gone off at a tangent

Good point about the indicators. I don't seem able to edit the post so...

Indicators in use:
EMA_RSI.EX4 indicator generates the up/down arrows on the price panel . Find out more and download from my EMA RSI Indicator post in the Programming Discussion area.
RSI 21
FX5_MACD_Divergence_V1.1.mq4 MACD Divergence indicator from http://codebase.mql4.com/source/2883

Michael

My first posted trade.
Long USDJPY
Entry 89.18
T1 89.98
Stop 88.54

Based on resistance breakout on 4 hour chart.
I will re-assess the target based on the behaviour if it reaches T1 as I think there could be more up side but the fact that it is a resistance line and very round number makes me expect it to react strongly.


All the best

Michael

Stop now at break even, its bouncing around the upper BB on the 4 hour chart and I'm itching to take the 52 points made so far. I'd better go away from the screen again and leave it alone

Michael

Hi Michael - well done!, a good trade, according to my price feed, you've just hit T1.

By the way, on the EMA_RSI system did you see the blue cross up on this same pair last night?

Regards,
aquiagora

Nice one Michael

Nice call Michael. Are you biting your nails?

Vincent

Thanks guys

This didn't hit T1 on my platform and I closed it manually at 89.88 for 70 pips. It was too close to the resistance and seemed to be reacting negatively so I chickened out. I realised some time ago that deciding on exits is far harder than entries.



I did see this and it was all I could do not to take the trade then! That would have been another 36 points on the H4 chart or 50 on the H1. That said I'm very happy with this small but significant victory

All the best

Michael

Hi, again,

These choppy price ranges cause the system to give quite a few false alerts. If we had deep enough pockets to place wide enough stop losses we could take them all because in the balance it appears the odds are favourable.

I only saw the USDJPY blue arrow later this morning as I am now starting to monitor more pairs. Regarding the NZDUSD trade, there was a warning silver arrow very early this morning, which indicated the trade was going to go down before going up. Anyway you'd have to be an insomniac to be able to catch all these signals, especially on the H1 timeframe.

I hope I can catch some EMA_RSI trades this week as I would really like to give this system a good front testing.

aquiagora

Hey Michael,

Good job! Your first venture you bag a nice one. You are learning well, as you even mimic some of Vahid's signals, getting within points of the target. This is still a soft spot with me, when to take the profits and when to let it ride. If I keep taking profits early, closing the trade, it throws off my R/R later down the road on losing trades. If I let the trade ride, I can get stopped out and lose everything. This mentality shows that I am still in the early stages and must mature. All things in time. Again nice one.

Vincent

So. Last night it was obvious again that this pair was going to break and climb from the 90.00 level. I placed my trade and guess what.
It did go into profit but missed my T1 before falling falling falling.
As you can see it touched the earlier support before climbing back up. Needless to say my stop was triggered and its currently above my entry point. I lost most but not all of my earlier gain on this pair.

I think I will spend the next few weeks tidying up my indicators, generally getting things in order and practising analysis on the various pairs without trading. I shall also write down my 'rules' so that maybe that will help me stick to them.
I'll stay close here throughout and the 'New Year - New Start'

All the best

Michael

The market may well prove you right Michael.
The problem with the USD pairs in particular at the moment is that you can't trade them without a relatively large stoploss. The movements are rapid and large.
Lets hope that the New Year will bring some more sensible movements.

Hi

Back again after a turbulent few weeks. I bought myself a nice shiny new laptop for Christmas and Windows 7 has been playing havoc with my sanity

I have also been spending some time trying to find a practical way of fitting in regular analysis into my day. Too often I have built up a good picture of what is happening then not got back to it for a few days and missed the move.

Anyway. Here is my view of the current state of GBP USD

Weekly.
Ranging between 1.57 and 1.7 Ended the week just below the middle BB so indecisive.
Daily.
Resistance break out happened, now hit resistance at 1.6334 and dropped. This resistance was also the upper BB. Short upper wicks on this and the previous candle seem to indicate little appetite for going much higher at the moment.

H4.
Shows more clearly the bounce off the resistance, and a break down of the support line that started 8th Jan. New possible support line drawn based on previous candle but this needs confirmed.
Crossed below middle BB then came up and stopped dead on. Note resistance below from the daily chart. This is still valid and possibly a stretch target area for any short trade.

H1.
New lower low made and now the previous low being tested as resistance.
Possible scenario: Bounce up from here to mid BB then down to form H&S

I think that there are many possible scenarios here and I will be trying to watch this pair closely this week. My feeling is that there is more down than up at the moment but that is opinion not analysis

All the best

Michael

USD JPY

Weekly:
Persistent downtrend, monthly shows a huge descending triangle. Just broke resistance and then dropped back through, I should actually move the line. Significant MACD convergence and very slight RSI convergence which also saw RSI trend line breakout though that has now returned to test the line. I'm not to experienced with RSI breakouts and I'd be happier if this one was a bit shorter and had started above 70.

Daily:
This has a descending wedge shape, opening out as it goes. The peaks and troughs are not following the lines exactly, I have drawn these on the high/lows instead of the close. This last high was higher than the previous so this could mean that the pattern is changing - as hinted at by the MACD convergence on the weekly.

H4 shows a forming Head & Shoulders pattern but I remember Vahid talking about these being continuation patterns sometimes. I need to check that out.
On the H1 chart there is a support from the 12th Jan 19:00 trough to now which though worth noting is only about 40 pips above the H&S neckline. I wouldn't trade a break in this support.

Overall I think there is a reasonable chance that this will break upward and perhaps enter a period of consolidation but even if it does there could be several hundred pips downward first.

All the best

Michael

Nice and clear reasoning Michael.
I like your style, very easy to follow and to understand your analysis
You certainly spotted things with the USD-JPY that I didn't!
Keep it up

Keith

Thanks Keith

I find yours easy to read too. Bad luck with the GBP-CAD trade, I see that it just hit your stop before dropping again to almost break even. Such is life

Michael