Results, 08 November 2005
Hi all, hope the markets are treating you all well. Yesterday proved to be the day the much awaited USDJPY drop happened. Many traders indicators have been showing oversold conditions for some days now, so there were many waiting for the drop to occur. I have included the USDJPY chart below and the reason's why I went short on it when I did, as you can see from my results below, it proved to be a good decision.
Ok here is the chart:
Ok let's run through it (open the chart in a new window if you wish). You can see at the left of screen the prevailing uptrend that had been in place for the last week. The first indication the uptrend was ending was when it made its first lower high early on 07 November. At this stage though it is only a indication, not confirmed, as we would need to see a lower low to give us confidence the trend was changing.
The next high was almost the same, this is called a "double top" and is a sign that there has been two efforts to push the prices higher, but a strong resistance turned both these efforts away. This quite often disheartens the "bulls", and the next low and high are important to see if they are releasing control.
The next low was exactly what we wanted to see, making a lower low near the end of 07 November, so if this is follows a lower high, we just might have a trend change as suspected. For those that have read up on the 123 method this lower low forms "2" of a 123 pattern. If the next high is a lower high than previous, then that a downtrend seems likely, and that high forms number 3 of the 123 pattern. Once the next high was confirmed to be lower, it was time to trade, I entered the trade near the turn around of that peak, for those wanting a safer entry, you could enter when the previous support level was broken (indicated on the chart).
As you can see, things turned out well, and, if you used the only indicator I use, the ADX to stay in the trade, you could have ridden it all the way to the bottom.
Ok ill see you all tomorrow.
Happy trading!
Today's result: +86 pips | Overall: +742 pips
Ok here is the chart:
Ok let's run through it (open the chart in a new window if you wish). You can see at the left of screen the prevailing uptrend that had been in place for the last week. The first indication the uptrend was ending was when it made its first lower high early on 07 November. At this stage though it is only a indication, not confirmed, as we would need to see a lower low to give us confidence the trend was changing.
The next high was almost the same, this is called a "double top" and is a sign that there has been two efforts to push the prices higher, but a strong resistance turned both these efforts away. This quite often disheartens the "bulls", and the next low and high are important to see if they are releasing control.
The next low was exactly what we wanted to see, making a lower low near the end of 07 November, so if this is follows a lower high, we just might have a trend change as suspected. For those that have read up on the 123 method this lower low forms "2" of a 123 pattern. If the next high is a lower high than previous, then that a downtrend seems likely, and that high forms number 3 of the 123 pattern. Once the next high was confirmed to be lower, it was time to trade, I entered the trade near the turn around of that peak, for those wanting a safer entry, you could enter when the previous support level was broken (indicated on the chart).
As you can see, things turned out well, and, if you used the only indicator I use, the ADX to stay in the trade, you could have ridden it all the way to the bottom.
Ok ill see you all tomorrow.
Happy trading!
Today's result: +86 pips | Overall: +742 pips
This entry was posted
on Wednesday, November 09, 2005 at 4:36:00 PM.
You can skip to the end and leave a response.
Posted byFriday, November 11, 2005 1:57:00 PM
Good trade. :) But trade against big trend is a bit of dangerous in forex.
Phildunn
Posted by
Saturday, November 12, 2005 3:54:00 PM
Yes as a rule you are definitely right phildunn, this was an exception.
» Post a Comment