3rd update 6-12-08

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The last 4hr bar closed up above 5400 the upper range of support. But just as important that bar was supported by operator accumulation and accumulation at this support level is also evidenced by operator/professional buying on the 1hr whenever we touch this support level.

A close above next resistance on higher volume would signal a 4hr bull pivot above support. If this happens a long trade should be your bias as you will have the pivot support as well as operator support beneath longs in that area.

Bar 1 on the chart was a volume divergence at support to signal that the bears lost control there. It was a high volume battle to a draw between bulls and bears, so this is our key bar on the way up especially since the high of that bar coincides with overhead resistance. If we break above the high of this bar price should continue up to 62% Fibonacci drawn from the top of the last down move to the last bottom.

If you want to try to get in early and lower your stop level you can enter long on a pullback to the close of bar 1 on the chart 5432 with your stop 6 pips below the low of bar 1. But be advised that this is a higher risk strategy because no pivot support has been developed yet. If you want to try it only take half of your normal position here and add to your position on the formation of the possible bull pivot spoken about above.

That’s all for now, I’ve been up all night so I gotta take a little nap.

Jerry
tradingmajic1@gmail.com
jerry@forextradingmajic.com

2nd update -eur/usd 6-12-08

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For my students who probably knew better than I did and spotted the 4hr bear pivot on the 4hr let’s talk about that bear pivot reversal bar. Now, you are saying that the pivot bar formed on lower volume so why did price continue down.

And that question allows me to segue into the new videos I have been producing to augment the principles outlined in your book, Volume-The Archimedes principle.

I’m going to mention the market facilitator index (MFI). The MFI tells you who is doing the buying and selling. For example on the pivot bar the MFI is blue. When the bar is blue it means that professionals moved that bar. A.K.A. Operators.

So even though this pivot bar had lower volume it is more important who generated the volume. If operators move the market in a given direction they are going to protect their position. So here they are going to protect their shorts down to the next support level.
And you want to trade with them not against them.

When the next bar after the pivot bar closed lower on higher volume the momentum was sealed and the herd then jumped in as evidenced by the green MFI BAR. When you see a green MFI bar,that means public participation is moving that bar A.K.A. THE HERD… operators fade the herd.

I know this stuff is in the book but volume can be kind of tricky and hence the new videos to compliment the book. Anyone who has ever bought THE ARCHIMEDES PRINCIPLE will get the videos free.

I have sent to your mailbox a free ebook about volume. No I did not write it but, it will help you understand why volume is so important. They give free downloads of the book to introduce you to a software program that they say will interpret volume for you automatically. I have no affiliation to them whatsoever. A friend directed me to their book I thought, “Wow, they are selling this software for $1100 dollars to do the very same things I teach in The Archimedes principle. I don’t know if their software works but I know that I actually teach you how to use volume and with plenty of chat examples and now the videos.

Jerry

eur/usd

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Okay, for those who did not take the 21 pip stop on the eur/usd alert I think I was able to stuble upon the right chart this time...

we have broken through the support low of 5440 and if we close below that level on this 4hr bar on higher volume than the last bar the trend is still down. After the close of this bar price should pull back up to 5440 and then you should switch your long to short.

The next support low is at 5365. exit your long on a pullback to 5440 and switch your position to short and ride it down to 5365. Any time you enter a trade you want to get out if price falls below the most recent low for a long trade or most recent high for a short trade.

Most short sellers have their entry limit orders just below the low and this selling volume there accelerates a downward move. When price comes back up to the broken low, all those longs who are in the red start selling out to break even and thats why you should too because that selling volume waiting there will cause price to at least bounce back down before price will continue up. if price does not close below 5440 you are still in business.

tradingmajic1@gmail.com

jerry@forextradingmajic.com

Cheers, or should I say, FEARS...

Jerry