USD/CHF 6-11-08
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On the usd/chf we have a bear pivot on the 4hr. I have noted the swing bar (S) and the pivot reversal bar (P) on higher volume.
Okay, our pivot point is the low of our swing bar at 1.0409 and this is our trigger (entry) point for the short trade here.
But I also want you to look at the blue line that price is currently bouncing up off of at 1.0389. Why is price bouncing up off of this level? That is because bar (x) is first level of psychological support below the most recent high.
Thus we undoubtedly should expect those short sellers to be buying back to close out. After all when price went above this bar (x) they are then in the position of waiting for price to come back to their entry point to break even.
The entire length of bar x is support to stall any continued down move. Now, look at bar (z). Bar z is a range bar so those of you who have lcm know what to expect. The bottom range of the range bar is support.
To summarize we have a directional signal, and once again those with lcm know the difference between a directional signal and an entry signal. The directional signal is down but we don’t have an entry signal until price rises to the pivot point and gives us our short signal in that area on our 5 or 15 min chart.
You see, when you have a directional signal that only give you direction but what about the timing of your entry. Direction is easy timing is not. Your timing determines whether you can stay in a trade if you’re right because your stop level can be in line with your risk/reward parameters.
So anytime you have a level where you plan to enter, just because price touches that level doesn’t mean it’s time to enter. Price must hit you level and then meet certain conditions. If your conditions are not met at your entry level then you must ignore the entry.
So, now lcm-ers, anytime you have a pivot and that pivot bar also hits s/r to bounce back towards the pivot caution is advised especially if the pivot is counter trend as we do here.
Therefore this is the way I am playing this pivot. I will look to enter on a 5 or 15 min signal somewhere within the range of the pivot bar (p) between1.0409 and 1.0423. Getting that signal I will enter and place my mental stop above the swing bar (s) above 1.0446. I will look to take profit at 1.0366 which is the open of the range bar.
Remember no 5 or 15 min signal within the entry zone means no trade is signaled. For those who can’t watch the 5 and 15 you can just place your limit order with the numbers above. There is nothing you can do about it. There is nothing wrong with it, but the technique above will help keep us out those rare times we are off base.
With all that being said the market may fool around until the crude oil inventories report comes out at 10:30 est. Oil is considered the new gold and has attached itself to the dollar as far as correlation. So, baring any surprise news announcements between now and then we may not see much action because I don’t see any catalyst (news) to get the herd in motion except for news coming out of Canada and the usd/cad seems to trade within it’s own world but since nothing else is on the horizon until the oil inventories the market may make due with that in the interim.
Cheers, Jerry
Tradingmajic1@gmail.com
jerry@forextradingmajic.com
Okay, our pivot point is the low of our swing bar at 1.0409 and this is our trigger (entry) point for the short trade here.
But I also want you to look at the blue line that price is currently bouncing up off of at 1.0389. Why is price bouncing up off of this level? That is because bar (x) is first level of psychological support below the most recent high.
Thus we undoubtedly should expect those short sellers to be buying back to close out. After all when price went above this bar (x) they are then in the position of waiting for price to come back to their entry point to break even.
The entire length of bar x is support to stall any continued down move. Now, look at bar (z). Bar z is a range bar so those of you who have lcm know what to expect. The bottom range of the range bar is support.
To summarize we have a directional signal, and once again those with lcm know the difference between a directional signal and an entry signal. The directional signal is down but we don’t have an entry signal until price rises to the pivot point and gives us our short signal in that area on our 5 or 15 min chart.
You see, when you have a directional signal that only give you direction but what about the timing of your entry. Direction is easy timing is not. Your timing determines whether you can stay in a trade if you’re right because your stop level can be in line with your risk/reward parameters.
So anytime you have a level where you plan to enter, just because price touches that level doesn’t mean it’s time to enter. Price must hit you level and then meet certain conditions. If your conditions are not met at your entry level then you must ignore the entry.
So, now lcm-ers, anytime you have a pivot and that pivot bar also hits s/r to bounce back towards the pivot caution is advised especially if the pivot is counter trend as we do here.
Therefore this is the way I am playing this pivot. I will look to enter on a 5 or 15 min signal somewhere within the range of the pivot bar (p) between1.0409 and 1.0423. Getting that signal I will enter and place my mental stop above the swing bar (s) above 1.0446. I will look to take profit at 1.0366 which is the open of the range bar.
Remember no 5 or 15 min signal within the entry zone means no trade is signaled. For those who can’t watch the 5 and 15 you can just place your limit order with the numbers above. There is nothing you can do about it. There is nothing wrong with it, but the technique above will help keep us out those rare times we are off base.
With all that being said the market may fool around until the crude oil inventories report comes out at 10:30 est. Oil is considered the new gold and has attached itself to the dollar as far as correlation. So, baring any surprise news announcements between now and then we may not see much action because I don’t see any catalyst (news) to get the herd in motion except for news coming out of Canada and the usd/cad seems to trade within it’s own world but since nothing else is on the horizon until the oil inventories the market may make due with that in the interim.
Cheers, Jerry
Tradingmajic1@gmail.com
jerry@forextradingmajic.com
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