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Launch Chart
17 hours ago
1 620
Technical View:

GBP/USD has broken out of a 6 month descending channel on the weekly chart to the upside. The initial bullish surge occurred at the key psychological level of 1.5 forming a triple bottom formation.

This suggests that the bearish pressure is diminishing and that we may see an established bullish reversal. A retest of the backside of the channel and 1.52 as new support will be confirmation of a change in sentiment.

Fundamental Picture:

1. Expectations for a timely Fed Rate-Hike are diminishing on dovish Yellen.

2, Expectations remain strong for a U.K Rate Hike

3. Governor Mark Carney retains Hawkish Tone

4. UK GDP within expectations for Q4 at 0.5%

5. U.S. GDP expanded by 2.2% in the fourth quarter of 2014, below initial estimates for a growth rate of 2.6% but above expectations for 2.1%.

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1 day ago
BTCUSD, W Neutral
79 1008

Unless Bitcoin manages a lasting break above 300, the apex of the descending cone points to 40 by year end.

The band is becoming very narrow. to achieve this would mean a lowering in realised volatility which would mean an acceptation of the new price paradigm (a slow death in other words).

I like watching bitcoin only because for me it is a great case study of human behaviour (more than other indices that have macro forces affecting the price too).

20 hours ago
GBPJPY, 240 Short
7 518
In general, I am expecting a continuation of GBP strength the coming week, drawing support from steady economic growth with the revised GDP coming out as expected and recent labour market data coming our positive. The Japanese Yen on the other hand is under pressure with the BoJ revising their growth forecast lower and most of the recent Japanese data disappointing the markets. This pair has been on a strong bullish run since the beginning of February, gaining 900 pips and it currently sits around the 618 retracement of the swing low that started December last year, creating a zone of resistance. The recent uptrend is starting to lose momentum with price action on the daily trading sideways for the last few days and failing to print a higher high on the 4H after the last outside return, showing a clear bearish divergence condition on the RSI.

Could it be a top has been formed, at least for now? Its possible, because we may have a double top pattern developing on the 4H timeframe. It is not certain the pattern will complete, but I put this trade candidate on my watch list just in case. We have plenty of Japanese and UK data coming out on Monday that will give an impulse to this pair. I am describing the most conservative play here (known as the 2618 trade), with the most conformation possible. The scenario is depended on a number of steps happening before entering the trade and as such its a true “if… then… scenario”. A double top is a double top if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA tried to make a higher high, but failed. This retest of resistance with less strength also follows from the regular bearish RSI divergence at the second top.

We need the following steps to occur before entering a trade: (1) price breaks below and closes below the neckline, (2) price retraces back up, until 618 retracement of the prior leg down and (3) price stalls, stops and reverses at this retracement level. In that case, SL goes above the highest high of the tops. TP1 = structure level where the retracement started, TP2 = 1272 extension of prior leg down. In terms of trade management, when TP1 is hit I would take profit on 1 position and roll my stop loss to breakeven, enjoying a risk free trade hunting for TP2.

There are 200 pips to be made (if this pair follows all the steps in the script) and the trade has a reward – risk ratio of 2.2!
1 day ago
BTCCNY, D Neutral
2 1330
We are in a consolidation phase. Let the market decide which way to go and buy/sell the breakout.
Possible targets are on the chart. Atleast 33% profit within a month after breakout should be possible.

Are you ready ? : ]
1 day ago
EURUSD, 30 Neutral
20 448
I will not go deep into this, because it quickly becomes a shouting match on who has the best system, which is usually more about ego than fact. It is sufficient to say that I have seen / know of profitable traders who use fundamentals, price patterns, Elliot waves, renko, moving averages, structure levels, pitchforks, trend rules and custom indicators. I will not get into which system is the best, because I have not back tested them all personally. This does not imply that it does not matter what system you use. Far from it. You need a system that gives you an edge. And the only way to know if it does, is to back test it against a relevant amount of data.

Adding filters to your strategy aims at improving your win rate by eliminating losers. It’s a way to get the odds on your side over a larger number of trades. Examples of filters you could add are: trade with the daily trend, trade with the fundamental direction, filter out unprofitable patterns, don’t trade during news events, only trade reversal patterns that complete at a key structure level, only trade breakouts after a retest of the trend line, add an extra indicator (e.g. stoch or sma line crossover or rsi divergence) or use a particular candlestick as a final entry signal. There might be a price to pay: if a particular filter delays your entry point, it can improve your win rate while reducing your reward – risk.

The opportunity factor relates to how many trades your method allows you to take per day / week / month. If by adding filters you are left with just a few possible trades a week, your win rate can go up, but your overall profit might suffer because there would be fewer trade candidates passing through to your filters. This will leave you with fewer trades to contribute to your overall profitability. You can increase this factor by adding more currency pairs to your portfolio or by adding trading hours to your schedule. When adding pairs, be aware of the correlation to the ones already in your portfolio.

Trade management relates to profiting from the trades you decide to enter. It aims at maximising your average winner while minimizing your average loser. The key is having rules that let winners run and exit losing trades without hesitation. Aim for realistic profit targets by reviewing the profit logic of your trades. Predefine a risk that you accept and don’t exceed. One of the ways you can do this, is by managing your trades in a multi-position manner, aiming for several profit targets. Take profit at various stages, as the market makes it available to you and roll your stop loss to break even or a profit protection point as the trade progresses.

Once you have the right system, rules and filters in place, you just need to trade your plan consistently day in and day out. Monitor your susceptibility for making errors and eliminate them one by one. Relaxed, concentrated and mindful like a Zen Monk. Don’t overtrade by chasing entries. Don’t under-trade by arbitrarily skipping valid opportunities. Be organized and prepared. A random, inconsistent approach to trading leads to random, inconsistent results that will never be optimal. So plan your trade and trade your plan.

Simply put, your expectancy per month is the opportunity factor multiplied by both the win rate and the average winner less the opportunity factor multiplied by both the lose rate and the average loser. For the example from my prior topic (see the link under Related Ideas), we know that the calculation was as follows: expectancy per month = 90 x 55% x €120,00 – 90 x 45% x €80,00 = €2.700,00. I have tried to give some tips and trick on how to influence each of the variables in this calculation with the aim to arrive at an improved mix, leading to an improved profitability.
1 day ago
AUDUSD, 120 Long
7 194
My bias is for Aussie to find support on the new monthly pivot. This is the first time in months Aussie will be opening above monthly pivot - last attempt saw gap below on open - it will have a roof of the weekly pivot, but the weekly pivot is higher again this week from last week. There is lots of traffic for price to move up trends and pivot points - plus price came very close to R3 on the weekly this week - the response usually is a gravitation back to pivot point or equal response to S3. Given all that if price finds support on the monthly pivot and closes above the weekly pivot then I would anticipate price to attempt new monthly trend. I will follow with the 8hr pivots.
1 day ago
SPX500, W Short
13 502
Auto-critic First
- Many people recently told me " you keep shorting a market that only goes up"
- That is partially true but is also making an implicit false statement.
(1) I have been looking for shorts since Jun14 (had some success, took profit in the right places and also got stopped tactically a few times).
(2) I am still holding the view that there is a top building process but i did not know what shape it would take (it is becoming clearer now and i will explain my view lower in this post)
(3) In the mean time the volatility has increased and although it appears the market keeps going up, overall the progress has only been 7% from top to top with many corrections of 5% and one correction of 10% within.

Going back to the market only:
- Since June 14, I "know" some sort of correction is coming (flat, fast, slow, volatile?).
- It could have had different shapes:
(a) Fast and swift 20% correction with bottoming process and resumption of the rally.
(b) A longer topping process with more shallow corrections and new high which may lead to a more lasting top (counter intuitively)

- It seems that the market has elected for (b) in the US while Europe is making its catchup.
- The Volatility Regime is interesting: volatility reduction until Jul14 and then got very agitated with no ability to break lower.
- I think the last move up is a squeeze that will leave space for another 10% correction in the next 8 weeks.
- Then i foresee, SPX may enjoy a last rally of 12/14% from 1900 which may be slow/steady over 3 months (a more sanguine rally than the Nov14 one).
- This last top in july15 (the 3rd one over 12 months) may leave the market subject to a longer/calmer/deeper correction into year end (a move where the volatility would increase gradually marking acceptance of the new price paradigm)

Conclusion in short:
- My view is the current new top is a bull trap and is part of a triple top in the second top which is forming since November 2014.
- Risk to that base scenario: some more drift up for 1/4 weeks up to 2140/2160 (europe will not allow i think).
- Whatever happens, given the posture on Dax, Nasdaq, Biotech... a correction is due in the next 8 weeks.

It is close to impossible to short tops without bearing 3/4% adverse moves over 3/5 weeks.
it is tricky because either you short small (30/40% size, that is probably the right thing to do) or you deal with options which can be eroded in theta if there is resilience.

My trading stance:
- 3 weeks ago i went short through 2000/1930 march put spread (will be a close call) and added 20% short via future.
- Now, after 3 weeks, and the market having gone up, I have added 20% short.
- The position is bleeding a bit but that was part of the game plan and I think it will perform either very well if a collapse occurs in the next 3 weeks or decently if after.

Note1: I am not holding short against a market that can make moves of 10% vertically. There is a market structure that prevents that when it comes close to the red line which only allows for drifts that are manageable (the situation was very different in Europe and that is why i have largely refrained from shorts on the DAX/ESTX).

Note2: With the latest move in Europe, the US / EUROPE posture is in better sync now.

I am a swing trader. To enjoy the honey, you need to bear some bee bites.

Don t forget the time perception, I noticed:
- People forgive me more for being wrong 5% in 2 days where i stop rather than 2% over 4 weeks where i hold my position and repeat myself.

I foresee some nice swings going forward.

Yacine Kanoun
3 hours ago
AUDUSD, 60 Neutral
2 118
A cypher pattern is forming on AUDUSD with a Fibonacci cluster at a previous minor support level.
The Risk/Reward ratio is not terrible with a 1.25/1 and a 2/1 for targets 1 & 2 respectively.
However, if we can manage to find an entry reason based on structure to ride down to the pattern completion (eg. break below & retest the 0.7780's) we can make much more out of this potential pattern.

See if it fits your trading plan and may the pips be with you.
19 hours ago
SPY, W Short
0 137
There will be a small rate increase of 25 to 50 basis points in 2016.

Smart money knows this and will exit early. 2016 marks the first bearish yearly candle. Highs could push 2300 but any more than that is pretty insane. Repeat the Price Action for the bubbles. A drop to 1850. A Bounce to 2000/2050 for the lower high then a bear market decline.
22 hours ago
SPX500, W Short
1 110
I'm not implying the spx rally is over or a top is in. But looking at the channel the spx has been trading in since 2011 lows, there is not much room to the upside at the moment and believe by observation there is more room for the spx to pullback. My plan is to sell the hwb from highs to lows as long as it acts as resistance with a tight stop. Last week was the first time the 61.8 short held as resistance. For the whole month of February there was no resistance, last week it showed up. If it continues, looking to sell resistance. If the market rallies back up to highs which it could, I would look to sell into strength with my stop above the top channel. IMO it's a good rr trade and better than the long at this moment. I would look to take off the trade ar 2020-2012 could even see the spx trade back to 1968.
8 hours ago
EURGBP, W Neutral
1 70
Since the summer of 2013, I've maintained a bearish stance on the EURGBP cross as I correctly anticipated the central bank divergence theme (article in French : http://bit.ly/1AqJJ5G). Back in December, I indicated that this pair could reach £0.72 with a break of the 2012 lows. This target is almost reached, and I will be watching the euro for the first signs of a corrective bounce around £0.725/0.7200 in March. I am aware that even with such a correction, the fundamentals will remain quite bearish, especially given that markets seem to have started pricing back in a BOE rate hike in 2016 after the quarterly inflation report published back in February. Nevertheless, I can't help but notice the 1998 and 2003 highs (£0.7025-0.7240) that was a key resistance before December 2007. I'll be focusing on short-term price action within this zone in March, and any bullish reversals on the daily chart may represent long setups to target perhaps as far up as £0.755. That said, if the anticipated correction is overall week with more of a range that sets in, I might end up coming back to the short side given the long-term fundamentals. A monthly close below £0.70 would suggest even more downside potential all the way to £0.653 (2007 lows).
15 hours ago
GBPJPY, 15 Short
0 143
This is and idea related to D1 chart analisis. It is still not late for an entry.
There are good opportunities on H4 and M15 charts.
H4 chart analisis:
Here on M15 chart there is a bearish bat already completed. Price formed a double top and currently rejected from the base, this is hour signal for entry.
Good luck.
19 hours ago
GER30, D Neutral
0 114
The DAX has had a huge rally of 36.51% from the October low, 22.55% in 2015 and 11.46% from the ECB's announcment of euro style QE. This is a huge rally that could enter some resistance with the start of the ECB's QE starting in March. next week the ECB meets on the 5th and could create a news reversal. IMO this current rally since the ECB announced QE could be buy the rumor, when the ECB QE finally starts QE, the rally has already happened, all the buying is used up and a news reversal is created. A news spike up to 11435-11465 where price is clearly rejected would be a sign that the DAX could be in for a pullback. However, would wait for a daily close after the ECB meeting on the 5th before taking any action in a short position, since the DAX is only allowed to go up at the moment.
51 minutes ago
GBPAUD, 60 Neutral
2 38
Normally I rarely trade any butterfly patterns, but as this one should complete around previous structure I might give it a try. Stop loss is a bit tricky in this case as we have to go and check for previous structure. The risk reward ratio is not great, all depending on how you enter the trade. If for example a double bottom would form at pattern completion, we can place the stop loss a lot close to our entry, completely changing the Risk/Reward ration to our benefit.
1 day ago
GBPUSD, 240 Short
0 197
To get involved, wait for the trendline break before shorting OR short when you see a bearish candle stick formation at the right shoulder.
(A good way to short is to spot divergence on the shorter time frames H1, M15 or even M5).
Stop Loss goes above the head,
2 hours ago
XAUUSD, 240 Long
3 92
This is an update of previous post.
Im still long, looking a H4 chart we see a series of HH,HL sequence.
There is an inverse HS pattern also, wich suggest a change trend.
Good luck.
21 minutes ago
USDCAD, 60 Neutral
2 23
Less is more ... We have 2 potential bats setting up here on the hourly chart. We'll check if one will complete and which one it will be ... but we are prepared for both directions :)
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