technical analysis in forex trading

[thebull27]

hi dp

well Im overwhelmed by all the questions, I guess I should think some of them through

Depends on what you mean by "good bet" and "short the position at this point". What do you expect out of the trade? Fractions of a point? Or do you want to ride it all the way back to S? If the latter, do you have a reversal signal to look for? Do you want to short right now or wait for price to stop you into the trade? What if price doesn't do what you expect? Where's your stop? Are you prepared to go long on a break through R? If the latter, what happens if price drops back to R? Or below? Where's your stop? Or do you plan to add to the position? Are you going to buy or short all in or do you plan to scale in?

There are other questions to address, but this will do for a start.

Db

 

[dbphoenix]

well Im overwhelmed by all the questions, I guess I should think some of them through

Understandable. However, this is the process you should go through before each and every trade. If you're not doing that, then perhaps you ought to set your trading activity aside until you have a more fully-developed trading plan and strategy.

Db

 

[jacinto]

technical question

I dont use indicators, and even less MACD. I am trying to anticipate price with the help of an indicator rather than a signal.

i have no trade on this, my overall view on this security (cable) is bullish, but that is an opinion, and feel this still has to retrace another 3-400 pips for it to give the long case for the last attempt at the mindblowing 2 bucks per quid. however, the question is towards the "technical case" that the low of the range represents the start of the last push up and todays move down (270 pips down) is a pullback ( stupid question probably).

attached is a 4 hour chart. The scenario is as follows

GBPUSD had been in an apparent bull flag, broken yesterday, and apparently rejected.
1) GBPUSD is in a range after a big move (purple rectangle)
2) apparent double top within rectangle that is triggered for short (white dotted rectangle)
3) low of bigger range at 23% fib of 1.81 to 1.985
4) on its own, daily price action of 03.03.07 is an outside bar after an inside bar on the weekly chart so far, touches high of range, but closes above swing low of apparent double top (white dotted rectangle).

the indicator
1) MACD and Cable show a "rising channel" that so far (meaning todays drop) has respected
2) failure of cable to reach top of channel, and limited by purple rectangle, could explain the drop in price, however MACD respects it at the top, but fails (so far) to reach the bottom

The question is, is there some sort of divergence here signalling that this is a deep very deep pullback, and we can only expect upside if MACD fails to reach bottom of the channel, or is price only confirming that this is a range and that is going to stay ranging for some time.

I know that the question is probably very stupid, but i am stuck with this technical interpretation. I know there is NFP at the end of the week, and this may only end up giving noise to the whole setup.

Thanks in advance

J

 

[thebull27]

jacinto great post very thorough with explanation

first of all the price channel was broken downwards later in the day.

I dont really know how to deal with indicators although the reason is that I just dont have enough experiance with them.

the double top inside the rectangle is not real because it does not answer all of the elements of double top (ther is no uptrend before it). what it looks like to me is that price is fluctuating inside a channel which was broken later on in the day that is a bullish sign.

I dont think that it is still the time to short the position because the uptrend in the daily wasnt broke yet I would wait for the uptrend to break before I short the position.

what I found interesting in your comments is your MACD channel. could you explain what your motivation is in the macd channel, what you are looking for and are there any other structures that you look for in other indicators?

thanks
BULL

I dont use indicators, and even less MACD. I am trying to anticipate price with the help of an indicator rather than a signal.

i have no trade on this, my overall view on this security (cable) is bullish, but that is an opinion, and feel this still has to retrace another 3-400 pips for it to give the long case for the last attempt at the mindblowing 2 bucks per quid. however, the question is towards the "technical case" that the low of the range represents the start of the last push up and todays move down (270 pips down) is a pullback ( stupid question probably).

attached is a 4 hour chart. The scenario is as follows

GBPUSD had been in an apparent bull flag, broken yesterday, and apparently rejected.
1) GBPUSD is in a range after a big move (purple rectangle)
2) apparent double top within rectangle that is triggered for short (white dotted rectangle)
3) low of bigger range at 23% fib of 1.81 to 1.985
4) on its own, daily price action of 03.03.07 is an outside bar after an inside bar on the weekly chart so far, touches high of range, but closes above swing low of apparent double top (white dotted rectangle).

the indicator
1) MACD and Cable show a "rising channel" that so far (meaning todays drop) has respected
2) failure of cable to reach top of channel, and limited by purple rectangle, could explain the drop in price, however MACD respects it at the top, but fails (so far) to reach the bottom

The question is, is there some sort of divergence here signalling that this is a deep very deep pullback, and we can only expect upside if MACD fails to reach bottom of the channel, or is price only confirming that this is a range and that is going to stay ranging for some time.

I know that the question is probably very stupid, but i am stuck with this technical interpretation. I know there is NFP at the end of the week, and this may only end up giving noise to the whole setup.

Thanks in advance

J