Sunday, March 30, 2008

Watching the Daily Charts

Aside from my quest to have a system work while I sleep, work, play, etc. I want to put my technical skills to work for some trading off the daily time frame. Back when I first started downloading Forex data and looking at the charts, and researching what exactly a "pip" was, I was mostly day trading and swing trading stocks. I learned this all myself, with a few courses, offered free to try to get you to sign up with the brokerage firm. I have no problem with high pressure sales tactics, they don't other me and I can exit the establishment without feeling like I hurt anyone's feelings. It's business, and in business, people either get screwed or they do the screwing. I prefer neither so I go for the free pizza and learning session, notepad in hand. Back to the subject.... I first downloaded Forex data so I could develop a system, and I didn't like all the gaps in the stocks. Since then, I have found that stocks, sectors, Forex, bonds, all have their own behaviours and different tools work for each. I have also found the daily time frame to have much less noise and are far less "jerky" than the hourly charts.

This post will list my thoughts on four pairs, and where I interpret the charts to be headed. Some I will actually put real money into.
The dots and circles on the chart or just to provide me with some basic buy/sell areas. They have to be used with the trend.

Downtrend, recently broke 1.00, and bounced back to 1.00. I'm looking for
consolidation around this level before it drops hard. I'm not playing this
looking for the drop, the chart doesn't tell me it's going to drop. The 1.00
level is importnat because it's "round" and "par". This time it cracked it.
(Look at USDCAD when it cracked par 9/20/2007). I'm watching it to come back to
1.02 to test the high, watching the STOCH, and watching my 5EMA trigger when the
time comes. One potential outcome is for the STOCK to drop below 20 and sit
there as the pair heads south, if this happens I'll be looking at riding that
sled to the bottom of the hill.

A short is setting up. It broke 100, a nice round number and 100 has became
resistance. This level has been support since 1999 and now that it has been
penetrated, it is resistance. I'll be shorting this soon, looking to catch
100.40 so I can set a tight stop. If I miss the move, there will be others and I
will learn from it.


Looks like its going into consolidation for a while on weekly, making Lower Low
and Lower High (see chart). I'll be looking to short at 2.0021 to 2.0026. On the
daily, it looks like it could make its way up to the higher high. Stoch is on
the way down, a good signal might be to wait until Stoch gets to 20 then short
for the start of the downtrend using a tight stop. The yellow line is
resistance. The hollow red circle is a sell signal, if I was watching this I
would have shorted at the low the day before the hollow circle appeared.


Weekly - no signal - good counter trend short, I don't play that game though.
Daily - huge uptrend continues, wait for pull back, wait until Stoch gets to
below 50 then buy on strength on the break of a daily high, also watch the 5EMA
system for triggers.

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