Only registerd users (ie TerraSeeds Tflow® graduates) can view this post. Graduates please log in with your UID and password that you use for Forum. Find out how you can be part of our privileged trading community. Email forex@terraseeds.com
Posted on 08 August 2010.
Only registerd users (ie TerraSeeds Tflow® graduates) can view this post. Graduates please log in with your UID and password that you use for Forum. Find out how you can be part of our privileged trading community. Email forex@terraseeds.com
Posted in Forex Trading, Technical StudiesComments (1)
Posted on 23 June 2010.
After 2 weeks of rallying, Monday and Tuesday price movement suggests that the party might just be over. This definitely appears to be the case if we inspect the daily chart where
However bulls might not have given up whereas bears might not dare to be totally assertive. Let’s see why.
When we switch to the 4-hour chart, a number of observations can be made:
Summary:
Posted in Forex Trading, Technical StudiesComments (0)
Posted on 30 May 2010.
Last week was yet another illustration on how important price confirmation is.
To recap what we discussed in Week 20 about the EURJPY, we stated that the double bottom would only be confirmed if price closed above the neck line (Yellow line). Well, price flirted with neck line but failed to break through it. What happened then? True enough, at the start of Week 21, EURJPY continued its downward trend.
Students of tflow® at Terraseeds were well prepared for this scenario and were able to pocket a neat profit. [See posting on Week 21: 145 pips in 2hr 45mins!]
So, Week 21 saw yet another new low for EURJPY in 2010.
However, an interesting scenario that was similar and yet not similar to the previous week (Week 20), took place in Week 21. What do we see on the H4 chart? Another double bottom!
This time round, the double bottom was confirmed with the break of the neck line (White line) and price rose thereafter. You guessed it again! Students of tflow® at Terraseeds were quick enough to recognise this reversal and joined in the ride up! Towards the end of the week, news coming out of the Eurozone (Spain) pulled the breaks on this mini revival.
So question on everyone’s mind is: Is this trend reversal following the double bottom sustainable? Here is what we can look forward to, going into Week 22.
I said it at the start; I will say it at the end. Price confirmation is key! Let the market show us the way…
Posted in Forex Trading, Technical StudiesComments (1)
Posted on 27 May 2010.
4 Hourly chart of Gold seems to suggest a pending Head and Shoulders chart pattern, which could hint towards a bearish reversal.
We are currently near on the high of the Right Shoulder, should it complete its formation, this could mean that Gold could fall beyond 1100 level.
The current Price level is also near to Week 18 high, which could be a resistance level. The resistance zone is emphasized by a confluence of an equidistant channel with the horizontal resistance level.
However, the bearish view will be invalidated if Price attempts to break beyond the high of the Head formation.
Posted in Technical StudiesComments (0)
Posted on 17 May 2010.
Only registerd users (ie TerraSeeds Tflow® graduates) can view this post. Graduates please log in with your UID and password that you use for Forum. Find out how you can be part of our privileged trading community. Email forex@terraseeds.com
Posted in Forex Trading, Technical StudiesComments (0)
Posted on 16 May 2010.
Only registerd users (ie TerraSeeds Tflow® graduates) can view this post. Graduates please log in with your UID and password that you use for Forum. Find out how you can be part of our privileged trading community. Email forex@terraseeds.com
Posted in Forex Trading, Technical StudiesComments (0)
Posted on 10 May 2010.
First published on SharesInvestment website on Monday 10 May 2010. Articles contributed to ‘Trend Spotting’ will be published here 1-2 days later.
Ezra exhibits a bearish reversal pattern called a Double Top. For such a pattern to be valid, chartists look out for 2 conditions.
Once the latter phenomenon appears, the double top is considered to be complete and valid. Prior to this condition, price movement may render the double top invalid if it changes path.
In layman terms, Ezra has a 52-week (also 2010) high of S$2.63 reached on 18 January 2010. This level becomes a psychological ceiling or resistance after market players take profit at S$2.57 without attempting to breach in early April.
After price corrects from profit taking, one would expect a floor or support to be found. A most likely level was around S$2.04 as this was a prominent resistance late 2009 and support early 2010. This situation did not arise. Price is now at a new low for 2010 and below the expected support level. What is the implication? The implication is that anxious market participants have to discover the new price support whilst bearish speculators see the new low as a justification to sell into strength.
Posted in SGX stocks, Technical StudiesComments (0)
Posted on 26 April 2010.
The EURUSD now has a support zone that had 2 precedents: late March and early April.
While the daily setup continues to be downtrend, bullish players may be hunting for reversal play on the lower timeframes.

Is that a bear trap for the Euro?
Posted in Forex Trading, Technical StudiesComments (0)
Posted on 07 April 2010.
Drawing on a support zone from last week’s (week 13) mid-week low, the Euro-bulls might see some hope of a reversal.
Let’s consider the facts. Based on trendline studies on the daily chart, the EURUSD remains on a downtrend. We saw however a March month-end close above the February low and rejecting the March low as well.
All this happened last week when Euro closed with a higher support. We are now near to that level although the market has exceeded on the downside. Any decisive move now above 1.3380 might be seen as a bear trap. Bulls could see this as a signal to attempt the March high.

EURUSD: an excuse for a little rally?
Posted in Forex Trading, Technical StudiesComments (0)
Posted on 06 April 2010.
The USDJPY made a small move into a higher trading zone. Foremost question in mind is whether it is likely to stay. On the other hand, a trendline on the weekly chart suggest that momentum of fall has indeed slowed. There might even be a sign of potential reversal.

1-year range for USDJPY

W-shape for USDJPY
Posted in Forex Trading, Technical StudiesComments (0)
Posted on 04 April 2010.
GBPJPY was the big winner for the week – Notice it moved northwards for more than 600 pips for the entire week. Could we have anticipated it? Yes we can. We noticed that price broke above the downward sloping trendline, indicating an end to its downside losses and the start of further upside gains. The upside movement was only confirmed when price did a pull back to the horizontal level of 138.00, where resistance turned support. Thereafter, GBPJPY went on a bull run which saw it break above the high of 17th Feb.

GBPJPY at top of channel

Confluence of resistances for GBPJPY

GBPJPY 4-hour chart
Looking forward, the key question is whether or not GBPJPY sustain its bullish momentum. We look at price action in an attempt to anticipate future price movements. Based on price action, we anticipate a possible reversal play for GBPJPY. How can we know for sure? We look at two possible pieces of evidence. The first sign points to price being at the top of the equidistant channel both in the daily and four-hourly charts. The next signal reveals that price is closer to resistance than to support. The Feb high of 145.294 serves as a key resistance point for GBPJPY. Therefore, price will meet with strong resistance and the bears will be closely monitoring this key resistance zone.
As for a continuation of the bull run, GBPJPY has to break above the top of the equidistant channel provided in the daily chart. After breaking above the channel, it will need to perform a pullback to the top of the channel in order for resistance to turn support.
How will the reversal play out in this week? Only time can tell.
Posted in Forex Trading, Technical StudiesComments (0)
Posted on 30 March 2010.
An inverted ‘Head and Shoulder’ has emerged. Confirmation is required now.

Breaking the neckline is now critical
Posted in Forex Trading, Technical StudiesComments (1)
Posted on 27 March 2010.
It is possible for traders to take a week-by-week view and do fairly good job at trading. The 4-hour chart is a good place to this and in the case of AUDUSD, 2 pieces of information jump out.
First a ‘Head and Shoulder’ pattern should be easy to see. This one is obvious so no need to check with your neighbor. Since the neckline is also broken, only a bear trap now can reverse the fortune of the Aussie. Secondly, we can see a series of lower highs and low lows.
Therefore there is only one way to go: sell resistance and take profit at support.
Few questions to ask now.
Since that’s the case, any early week pullback will create the precedent for a mid- or late week re-test of level may see big move when everyone is convinced.
I hope every thing will fit perfectly.
By the way, some students told me my short bias was 2 weeks too early. I am glad I wasn’t 2 months too early or 2 months too late.
Posted in Forex Trading, Technical StudiesComments (1)
Posted on 16 March 2010.
First published on SharesInvestment website on Monday 15 March 2010. Articles contributed to ‘Trend Spotting’ will be published here 1-2 days later.
—
The daily and weekly charts of Genting show several weaknesses:
There is a last line of defense for bulls. So long as price can remain above the trendline (brown; shown in chart), the trend remains intact. How do we reconcile the two pictures? This sentence summarizes: Genting remains in bullish trend but weakness will stay until price can clear all the overhead resistances.
—
Posted in SGX stocks, Technical StudiesComments (1)
Posted on 12 March 2010.
It is getting hard to decide where the EURO is going these days. The charts offer few clues and it is up to nimble traders to find their space.
While the daily chart shows EURUSD firmly in a downtrend, we are after all approaching the resistance and enthusiastic bulls make see a case for an up-move. It is usually common sense not to defy the trend and indeed the reward to risk proposition seems to favour a short. It is however possible that a reversal might occur if the charts are showing a higher base.
Careful bulls should only enter after retracement following a confirmed move. Bears watch for trigger.
Posted in Technical StudiesComments (1)
Posted on 08 March 2010.
The Sterling has made a worthy break and reversal. While momentum traders consider going long, last week’s resistance must be watch – any failure to support at this point may be considered a bull-trap for big trend bears.
Posted in Technical StudiesComments (0)
Posted on 29 January 2010.
The USDJPY is printing a potential wedge on the day chart as well as inverted head and shoulder in the 4-hour. It is critical to confirm with break of neckline or breakout of wedge.
Posted in Technical StudiesComments (1)
Posted on 21 January 2010.
Chart patterns are commonly found for almost any price charts. It is more visual when view using a line chart than candlesticks or price bar chart.
As each price bar forms, it may give the chartist a perspective in relation to the formations showed by the historical bars.
Today, we shall dissect a 4 Hourly chart of CHFJPY to understand how patterns can form and perhaps to take advantage of the formations for trading.
As shown above, it is evident that CHFJPY has finished a Head and Shoulders Pattern which is a Bearish Reversal of the previous Up trend. The Up trend happens to be at the ‘armpit’ of the Left Shoulder and Price break down the trendline, indicating the Head is formed. With the falling price, buyers wanted for an entry and attempted to push the price higher, thus forming a pullback.
But it goes to show that more are keen to sell than buy, and after several attempts to break above the up trend line, there is a sharp plunge which is forming the Right Shoulder.
On the same chart with the Head and Shoulders pattern, the keener eye might find more patterns within the Head and Shoulders!
It is easy when we analysis charts in hindsight, when the formations were already there. It is a challenge for us to make sense of the charts as the days goes by. But after knowing a possible formation is underway, you can be sure many chartists who see it will want to ride it.
What we see for CHFJPY is on a 4 Hourly chart, which the above patterns were forming as the weeks goes by. It also shows that when the bullish sentiments of the Big Boys faded, the bearish reversal can last for a long time before another big move comes.
Posted in Technical StudiesComments (0)
Posted on 13 January 2010.
It is difficult to figure where the Euro is going. An inspection of the daily and 4-hour charts reveal 2 possible scenarios.
Bearish flag
The daily charts suggest that the Euro may continue its downward move because of this continuation pattern. The flag is characterized by the flagpole and which suggests a lot of momentum. A body of the flag completes the pattern. This body is usually perpendicular to pole. A body that converges into a triangle is called the pennant.
For the flag to be valid, price remains within the resistance and support of the flag. It is ultimately confirmed when it moves downward and breaks the support level (see dotted line motion).
Reversal
The 4-hour charts paint a slightly different picture that can be visualized as a bullish reversal. The Euro was range bound the past 2 weeks (last week of 2009 and first week of 2010). This week price made an upside movethat was higher that last weeks high. Action till now seems to suggest that a support has been formed. If the bullish picture is true, price will find a base and penetrate Monday’s high level. Otherwise, the downside move below support will support the bearish flag scenario.
Posted in Technical StudiesComments (0)
Posted on 12 January 2010.
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
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.
Posted in Technical StudiesComments (1)
