Elements of a reversal in EURYEN

On January 15, 2010, In Technical Studies, By Soh Tiong Hum

In previous postings, we discussed the elements of a good signal. This week we see such a combination unfold before us in the EURYEN. Lets recall.

A good signal has the following:

1. Resistance level provides a ‘hard’ place for price to reverse
2. A chart pattern hints at reversal
3. At the critical point, a candlestick pattern can be seen
4. All of the above come together in a confluence ultimately confirmed with trend line break

Let’s good at the EURYEN chart.

Firstly, the daily chart provides the ‘hard’ place to start looking for a reversal.

Daily resistance hints at reversal

Daily resistance hints at reversal

At the 4-hour chart, we can other elements fall in place.

  • The violation of the first trend line shows the end of the predominant trend
  • A price pullback after the first trend line break hints now a head and shoulder pattern
  • A second (shorter) trend line can be drawn to indicate the trend of the pull back
  • A big evening doji look-alike bar that violates the second trend line shows the breakdown of the pullback
  • Finally the violation of the neckline confirms the head and shoulder formation
Head and shoulder in EURYEN at resistance

Head and shoulder in EURYEN at resistance

Some previous postings

Elements of a trade signal

Reversal signal also shown in Loonie

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About the author

Soh Tiong Hum

Director of TerraSeeds Market Technician Pte Ltd. Forex Trading Trainer. Tiong Hum believes that looking at price action is the best way to trade. Reminder: [1] Investing and trading activities carry risk that may not be suitable for everyone. It is each individual’s responsibility to evaluate that risk before participation. If in doubt, please visit a financial advisor. While TerraSeeds Market Technician Pte Ltd conducts courses on investing and trading, we are unqualified to evaluate your risk for you. [2] Testimonials and illustrations may be shown from time to time. This testimonials and illustations may come from trainers or students. Their performance is not an indication of your performance. [3] Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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Further Downward Spiral for the Greenback?

On January 12, 2010, In Technical Studies, By David Yew

Based on a Weekly Chart, USDJPY is intact on a downward Channel as shown on the chart below. Even in the last year, the USDJPY has a smaller channel and is still on the downward trend. So, it is safer to trend following USDJPY by shorting it whenever it reaches the top of the channel.

As from the same chart, the probability of bearish reversal candlesticks is high, so we should keep a watch out for evening stars, spinning tops, dojis, bearish engulfing, etc. Just last week ending 8 Jan 2010,  a hanging man variant is formed, so if this downmove is valid, the possible reversal may be at 84.88.

This is based on the assumption that USDJPY will not exceed 95.23 for the coming weeks.

USDJPY Weekly Analysis

USDJPY Weekly Analysis

With that long term outlook in mind, let’s consider a possible swing movement which could be taking place in the near future.
The 4-hour line chart vividly showed a possible Head and Shoulders pattern which a Right Shoulder is in midst of formation. The validity of this pattern will persist if the tip of Right Shoulder is lower than the Head.

USDJPY 4 Hour Chart

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David Yew

Associate Trainer

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Reversal signal also shown in Loonie

On November 25, 2009, In Events and Announcements, Technical Studies, By Soh Tiong Hum

Continuing our discussion of a reversal using EURJPY, here is another illustration where we can see the recurring patterns.

A look at the weekly chart of the Loonie shows that a reversal pattern can be found between October 2008 and March this year.

There recurring patterns we found in the EURJPY can be found here:

  1. A resistance provided the ‘hard place’
  2. The head and shoulder chart pattern provided  a clue to a reversal at the right shoulder
  3. The right shoulder was also an evening star candlestick pattern
  4. Lastly the break of the neckline provided the last confirmation we need.
Loonie reversal pattern displayed several clues

Loonie reversal pattern displayed several clues

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About the author

Soh Tiong Hum

Director of TerraSeeds Market Technician Pte Ltd. Forex Trading Trainer. Tiong Hum believes that looking at price action is the best way to trade. Reminder: [1] Investing and trading activities carry risk that may not be suitable for everyone. It is each individual’s responsibility to evaluate that risk before participation. If in doubt, please visit a financial advisor. While TerraSeeds Market Technician Pte Ltd conducts courses on investing and trading, we are unqualified to evaluate your risk for you. [2] Testimonials and illustrations may be shown from time to time. This testimonials and illustations may come from trainers or students. Their performance is not an indication of your performance. [3] Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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Elements of a trade signal

On November 21, 2009, In Events and Announcements, Technical Studies, Trading Technique and Strategy Discussion, By Soh Tiong Hum

A good signal usually combines a number of qualities:

  • Price follows the path of least resistance; therefore a roadmap that forms support or resistance is a good reference for a turning point.
  • When the price chart prints a chart pattern, the pattern itself provides plenty of clues. Chart patterns usually fall into 3 categories:
    • Continuation
    • Reversal
    • Both of the above
  • A candlestick will usually provide a trigger. Some candlesticks are better than others but they are give a hint of market sentiment at the roadmap.
  • Lastly a break of a trendline is good confirmation. Note that there is only a fine line between playing ‘breakout’ versus using a trendline as trade confirmation. With the forex market, traders should always be wary of breakout trades because professional will fade the trade.

    Let’s look at the EURJPY chart. This is a monthly chart which gives us an excellent illustration of the concepts involved.

    Note that the chart has all of the following elements:

    1. Roadmap – Channel meets horizontal resistance; level at resistance proves harder to beat
    2. A head and shoulder hints at reversal
    3. At the critical right shoulder, an evening star can be seen
    4. All of the above come together in a confluence ultimately confirmed with trend line break

    All elements of a reversal can be found here

    All elements of a reversal can be found here

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    About the author

    Soh Tiong Hum

    Director of TerraSeeds Market Technician Pte Ltd. Forex Trading Trainer. Tiong Hum believes that looking at price action is the best way to trade. Reminder: [1] Investing and trading activities carry risk that may not be suitable for everyone. It is each individual’s responsibility to evaluate that risk before participation. If in doubt, please visit a financial advisor. While TerraSeeds Market Technician Pte Ltd conducts courses on investing and trading, we are unqualified to evaluate your risk for you. [2] Testimonials and illustrations may be shown from time to time. This testimonials and illustations may come from trainers or students. Their performance is not an indication of your performance. [3] Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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    Technical Analysis Modules for City Index

    On July 11, 2009, In Events and Announcements, By Soh Tiong Hum

    City Index is running a total of 9 educational Technical Analysis Seminars from 22 July 2009 till 24 September 2009.

    These are organised in 3 levels of sophistication:

    Basic

    * Moving Average
    * Moving Average Crossover
    * Support & Resistance
    * Trading with Oscillators

    Intermediate

    * Bollinger Bands
    * Japanese Candlestick Patterns

    Advanced

    * Chart Patterns
    * Fibonacci Ratios

    Trainers from TerraSeeds Market Technician Pte Ltd are speakers at these seminars. More information can be found at http://www.cityindexasia.com.sg/learn_to_trade/seminars.aspx

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    About the author

    Soh Tiong Hum

    Director of TerraSeeds Market Technician Pte Ltd. Forex Trading Trainer. Tiong Hum believes that looking at price action is the best way to trade. Reminder: [1] Investing and trading activities carry risk that may not be suitable for everyone. It is each individual’s responsibility to evaluate that risk before participation. If in doubt, please visit a financial advisor. While TerraSeeds Market Technician Pte Ltd conducts courses on investing and trading, we are unqualified to evaluate your risk for you. [2] Testimonials and illustrations may be shown from time to time. This testimonials and illustations may come from trainers or students. Their performance is not an indication of your performance. [3] Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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    EURUSD short outdone by strong bullish momentum

    On April 30, 2009, In Events and Announcements, Software, broker and trading platform, By Soh Tiong Hum

    This is another execution by a student. The analysis is flawless but strong market momentum may have stopped this trade out. There was a bearish candlestick pattern in the hourly chart that was apparent in the second attempt on the resistance line. A valid but unfortunate short.

    Hi All,

    Last night i notice a huge movement in the EUR/USD.

    1) initial thoughts at chart “eurusd1 h4″ was to long once the candle close above the “purple channel”

    But some teaching by Binni and Tiong Hum came into my mind  “bigger picture”, “false break”, “huge increase is hard to sustain”.

    By looking at the bigger picture i manage to draw another channel (in blue) and when i put in the fibo level it is clear to me that shorting this pair is more in line with what i learn.

    2) Zoom out to look at the bigger picture draw another 2 channel (blue)

    Went in to fine tune at H1 Short after forming of the doji red candle

    Regards,
    Ivan

    EUR meeting resistance

    EUR meeting resistance

    Confluence met

    Confluence met

    There was apparently a evening star candlestick

    There was apparently a evening star candlestick

    The postings here are analyses made for educational purposes. None of the authors, contributors, trainers or management has license to give investment analysis or advice. It is made purely for learning purposes and at no time should be taken as advice to buy or sell. We are not liable to any damange or loss in anyway.

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    About the author

    Soh Tiong Hum

    Director of TerraSeeds Market Technician Pte Ltd. Forex Trading Trainer. Tiong Hum believes that looking at price action is the best way to trade. Reminder: [1] Investing and trading activities carry risk that may not be suitable for everyone. It is each individual’s responsibility to evaluate that risk before participation. If in doubt, please visit a financial advisor. While TerraSeeds Market Technician Pte Ltd conducts courses on investing and trading, we are unqualified to evaluate your risk for you. [2] Testimonials and illustrations may be shown from time to time. This testimonials and illustations may come from trainers or students. Their performance is not an indication of your performance. [3] Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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    Trading Techniques and Strategy Discussion – EURUSD

    On April 29, 2009, In Events and Announcements, Software, broker and trading platform, Spirit food, Trading Technique and Strategy Discussion, By Soh Tiong Hum

    Posting in terraseedsgooglegroups by Swee Beng. In the 15 min and 60 min charts, Swee Beng has pointed out the excellent setups that were available. It is also an excellent illustration of charts in different timeframes yielding different results to their users.

    Traders need to bear in mind then to constantly check the higher timeframe and to select the setup that will provide a higher reward-risk outcome.

    Finally in the 4-hour chart, we have some zones to wait for.

    My descriptions is as follows:

    M15 Chart

    1) This chart shows a potential short trade because the trendline from the 1234 setup has been broken by the downward momentum movement therefore sellers will be looking for candlestick formation signal to confirm a short entry.

    2) The potential exit targets for short-sellers will be fibo-E 138.2 and 161.8.

    H1 Chart

    1) The fibo-E from the M15 timeframe meets with fibo-R 76.4 of the H1 timeframe. This means that sellers want to get out and buyers want to get in at this optimum level. It’s a marriage made in heaven.

    2) This is confirmed by the tail of the candle briefly touches fibo-R 76.4 and immediately rises to break trendline from downtrend. This shows price respect fibo-R 76.4.

    H4 Chart

    1)  Price break trendline convincingly and this move might be the first indication of reversal.

    2)  Price retraced to form a double bottom and a potential equidistant channel is created.

    3)  Buyers will be looking for an optimum entry zone somewhere near the lower half of the equidistant channel where there is a horizontal support line and fibo-R level.

    4) The potential exit target will be at fibo-E 138.2 which is at the upper half of the equidistant trendline.

    Thanks
    Swee Beng

    15 minute chart

    15 minute chart

    Hourly chart

    Hourly chart

    4 hour chart

    4 hour chart

    The postings here are analyses made for educational purposes. None of the authors, contributors, trainers or management has license to give investment analysis or advice. It is made purely for learning purposes and at no time should be taken as advice to buy or sell. We are not liable to any damange or loss in anyway.

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    About the author

    Soh Tiong Hum

    Director of TerraSeeds Market Technician Pte Ltd. Forex Trading Trainer. Tiong Hum believes that looking at price action is the best way to trade. Reminder: [1] Investing and trading activities carry risk that may not be suitable for everyone. It is each individual’s responsibility to evaluate that risk before participation. If in doubt, please visit a financial advisor. While TerraSeeds Market Technician Pte Ltd conducts courses on investing and trading, we are unqualified to evaluate your risk for you. [2] Testimonials and illustrations may be shown from time to time. This testimonials and illustations may come from trainers or students. Their performance is not an indication of your performance. [3] Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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    Awaiting FOMC decision tonight

    On June 25, 2008, In Economic Indicator, Trading Technique and Strategy Discussion, By Soh Tiong Hum

    Dojis undecidedThe fundamental arguments are compelling. The technical picture irresistable. Bulls have their say. Bears polish their claws.

    One thing the candlesticks tell us: both sides are willing to stay on the sidelines until a clearer picture emerge.

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    About the author

    Soh Tiong Hum

    Director of TerraSeeds Market Technician Pte Ltd. Forex Trading Trainer. Tiong Hum believes that looking at price action is the best way to trade. Reminder: [1] Investing and trading activities carry risk that may not be suitable for everyone. It is each individual’s responsibility to evaluate that risk before participation. If in doubt, please visit a financial advisor. While TerraSeeds Market Technician Pte Ltd conducts courses on investing and trading, we are unqualified to evaluate your risk for you. [2] Testimonials and illustrations may be shown from time to time. This testimonials and illustations may come from trainers or students. Their performance is not an indication of your performance. [3] Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

    Visit Authors Website

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