Trees don't grow to the sky! Not even in Turkey!

FX:EURTRY   Euro / Turkish Lira
281 6 10
This Bull has become extremely stretched! Tehere are some warning signals for a possible sharp correction ahead!

- Ichimoku bullish , but very overbought, price far above equilibrium level marked by Kijun Sen and future Senkou B
- Heikin Ashi is still bullish , but we have a warning signal in haDelta, which after printing an extreme high around 0,20 (!) has stertd to build some negative divergence with its SMA3!
We have to watch weekly candle close, as the candle will still likely remain green, but the length of its wick and body will give further indication on Friday for next week(s)
- weekly supports and possible pull back tgts: 3,2670 / 3,1120

- Bullish Ichimoku setup, but now substantial higher high compared to last peak of 24/Aug candle. Kijun Sen may start to attract price back a bit.
- Heikin Ashi candle today signals start of consolidation or maybe a pull back: candle with inside body and both upper and lower wicks. Our quantification tool, haDelta gives more early warning signals: haDelta/SMA3 cross down again with third lower high, which means negative divergence and tension in the market.
- Profit taking and corrective bearish wave can accelerate below 3,40-3,38

Please not that EURTRY             has become extremely volatile! So may you enter a trade in any direction, take the increased volatility in account when you decide about size of your position!
This is my basic rule No.1: position sizes always have to be calculated based on your trading capital, your amount risked/trade (stop loss), and the volatility of the instrument (I use 20 days ATR)
My rule No 2.: Counter trend swing trades I do only with 0,5 risk unit (maximum 1 unit if momentum really works), while in trend direction I do minimum 1 trade unit, max up to 3-4 units leveraged.

Risk management and discipline are the alpha and omega of trading!

Actually seems like the move started to accelerate since I placed this post. Down to 3,4085. I bought some USDTRY OTM put option too, but I like this small outright EURTRY short more.
+1 Reply
bilk29 Kumowizard
Whaht du you thing USD TRY
Same as for EURTRY. Stretched, should correct. Which one will be deeper I don't know, that depends on the USD (basically on EURUSD). sp is a lot dependent on FED decision. As you probably realised EM ccy crosses have been rather USD driven, and TRY flows are mainly USD based too.
If we get the same signal and confirmation of pullback on USDTRY, there 2,92-2,95 zone will be possible to retest.

Thank you
you're welcome! Just doing my job. By the way, if you like to monitor EM ccys, have a look at EURHUF too! Close to a trend/Kumo/100 WMA break on daily, which would validate a major double top as well. In that case tgt 300-302. You may have seen it from me earlier today on Twitter post.
+1 Reply
IvanLabrie PRO Kumowizard
Interesting, thanks for sharing mate.
+1 Reply
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