Chinook's EUR/USD (E/$)Mumblings

Quote from Gringinho:

I think most of us fall into this trap every now and then. As long as there is no way to stop us from doing mistakes, the best thing we can do is try and identify when it's happening and thus try and control it.

Also, looking at the many tries at range breakout the last few weeks (last month?) it also adds to trading frustration. Looking at today's chart - it's a "trending day".
Why try and counter-trade it ? Revenge-trading, right ? :)

Finally - let's face it - not all systems work every day - all day long, especially when there's basically just a few big moves per day. Staying out of trades - just picking the ones you "know" are right helps rescue those days - especially if one realizes that the system don't work that day.

Trying to stick to my short bias above 1.2415 today was very stubborn - and mostly wrong - as long as I try and stay within timelimits and no overnight positions.
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Yes, missing out the nice clean upside move definitely made the trick. Although I was initially short biased, I was long for a while but then went back to shorts. Most of the day, the price was over my adaptive MA indicating a long bias for my plan.

I'm still partially carrying my 1.2423 short. I'm holding overnight and risking 35 ticks. I will not trade tomorrow if I get stopped out.

Edit:
What screwed me today, is that the futures made higher highs on low volume. But under this volume condition, the plan calls for short entries once the price goes below adaptive MA. Oh well... Now finally the price is below MA. But now it's chop time so it's not that significant.







 
Well, we were getting closer to the 1.2410 area .. but the stubborn 1.2417-18 area which enclosed much of the afternoon action is holding out still.

For some more perspective on the move above 1.24 - read the following from Deutsche Bank thursday:

EUR USD (1.2330) Yesterday’s price range was remarkably narrow – just 50-pips. Despite a brief flurry of activity following the publication of a better-than-expected final US GDP figure for the second quarter, the euro clung to the opening price of 1.2325 and ultimately closed within 10-pips of it. In Asia this morning, it has remained quasi-static. Short-term traders have not had too much luck trying to pick the top for euro over the last couple of days. The refusal of yesterday’s modest correction in the oil-price to produce a corresponding rebound in the dollar will not have helped their cause either. But this is unlikely to have shaken their deep distrust of the single-currency at these ‘lofty’ levels. For the most adamant bears, however, the relatively steady prices above $1.23 will have had the unfortunate consequence of influencing their perception of what is expensive. In short, they will have grown accustomed to the higher rates and may now look for even higher levels before putting in place their shortselling strategies. Nevertheless, we still consider that by the time the euro reaches 1.2415/20, the bulk of these bearish positions will already have been created. A subsequent breach of this threshold would unleash a short-covering rally capable of lifting the price an additional 200-pips. On the downside, the critical support is unchanged at 1.2165. However, the violation of an initial demand point at 1.2235 may give an earlier indication that the euro is to suffer such a setback.


Thomson/IFRMarkets has a long from 1.2388 and want a 1.2450 test (march 1 value I think). :)
 
I'm still short from yesterday's session. When I went to bed late night, I moved my stop to the entry level 1.2423, 4 ticks away from then current market (5am EST)and didn't get stopped out! This was a nice little surprise in the morning.
 
Remember to get your profits on that short some time ...
My problem yesterday was that I couldn't wait for the target to get reached - I almost never did and then went back towards my entry and at a loss. I should have recognized that we were still at the same modus operandi with small oscillations just like when the latest chopping action the last weeks have predominated trading.

ISM number might shake you - but then it could be a non-event like the GDP surprise reaction. Better take some profits while stalling before number and then re-enter later ? (edit: confusingly written)

Today Deutsche Bank says:

EUR/USD: Range-betters’ patience wears thin -
EUR USD (1.2425) A one-way move of 100-pips in the euro, without any news whatsoever, is no longer a remarkable event these days. Some traders spoke about an options barrier being reached – a useful catch-all, in any case. Others spoke about terror fears as yet another passenger aircraft – the third in as many weeks – was apparently diverted following a warning. Either way, the single-currency raced to a 1.2420 peak and, in the first instance, got stuck there. But, even after the release of broadly favourable US economic data, the euro did not retreat substantially, which suggests that there were not too many short-term long positions in the market on which profits could be taken. Instead, it crept slowly higher into the NY close and settled at the highest level of the day (1.2435/40). For range-traders, yesterday’s upswing may have come as a surprise – and some, no doubt, had to stop their losses - but the rest might not be overly worried. After all, they will tell themselves, the euro is still in a range. And, for he who wants to see a horizontal trading band, there is no shortage of historical peaks near the current price (e.g. the July peak of 1.2460) to reassure him. But we suspect that the bears have already created their positions, in which case, the best offers are already behind us. All that now remains is for the unwinding of existing shorts to buoy the euro higher to 1.2625/30. As long as the price holds above 1.2335, this will be our near-term target. Intermediate resistance comes in today at 1.2540.


edit: think I'm seeing careful trading and bear-traps of yesterday getting sprung. Had a nervous and quick short for b/e and a more confident long for 4 pips.
 
I tightened my stop and added some more and got stopped out at 1.2403. I think we'll chop here for a while with a slight long bias. I'll wait until after ISM numbers to open a new position.

Earlier in the weak, I traded according to my plan. I had exact entry and exit numbers displayed by Tradestation. When I followed "the plan" I was calm most of the time, kind of doing what I was told to. When I aborted the plan yesterday, I got glued to each tick. I had to constantly evaluate if I should enter or exit on that tick. My head was ready to explode--I was in a really terrible state of mind. It was also extremely exhausting.

Edit: Time to take a long and hot shower before the ISM numbers :)
 
Quote from chinook:

I tightened my stop and added some more and got stopped out at 1.2403. I think we'll chop here for a while with a slight long bias. I'll wait until after ISM numbers to open a new position.

Earlier in the weak, I traded according to my plan. I had exact entry and exit numbers displayed by Tradestation. When I followed "the plan" I was calm most of the time, kind of doing what I was told to. When I aborted the plan yesterday, I got glued to each tick. I had to constantly evaluate if I should enter or exit on that tick. My head was ready to explode--I was in a really terrible state of mind. It was also extremely exhausting.

Edit: Time to take a long and hot shower before the ISM numbers :)
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Best thing to take those profits. It always helps - if it still moves - then re-evaluate from where it is currently and forget about trying "to continue the move" when re-entering.

Pausing with profits is always ok.
After some losses self-confidence is always lower - so let yourself to some profits.

Also, one need to recognize how the market is acting. Some periods with tight ranges - asian sessions which are extremely dull lastly and perplexing big moves "without fundamental reason" is taking it's toll on all traders. Recognizing the extra necessity of being careful - and seeing that the markets favour fewer trades and opportuinities per day is also important.
Go for the best setups only and be careful and book those profits.
:)


[12:45 EUR/USD: US Yields On The Rise Again] Boston, October 1: EUR/USD has taken is stride news of another Zawahri tape and is dipping mildly as US yields continue to edge up. US equities are firm this morning as well, helping the greenback. Dealers note a 1.2400 expiry this morning which should help keep the market from straying to far a field until after the expiry and the data. Support remains at 1.280/90 though stops are building below.

[12:06 EUR/USD: Range Bound Despite EUR/GBP Surge] Boston, October 1: EUR/USD ranges are hardening as Asian options-related selling continues to cap the topside ahead of 1.2450/60 barriers and support at 1.2380/90 is reinforced. EUR has been out of focus this morning as the pound takes center-stage. Europe saw a mixed bag of data this morning as the Eurozone PMI slumped but German PMI actually showed some signs of life, rising to 55.3 from 48.5. ISM is due at 14:00 GMT, and is expected dip to 59.0 from 61.5 in September, still a very strong number. Range-trade is seen early on with short-term charts showing room for a rise back toward the 1.2435/40 area. Stops are seen below the 1.2380 level, dealers report.


edit: much weaker Michigan consumer confidence number than expected - 94.2 - only one of 55 economists Bloomberg surveyed had a estimate reading of 94. Hardly a move on the EURUSD. ISM is imminent - and a move will be compunded into that number.


<pre>| [ EUR/USD TRADING PAGE ]
| [SPOT] |[TECHNICAL SIGNIFICANCE] |[RECOMMENDATION] | [POSITION]
: 1.2710(M) |daily high Feb 24 |take profit, buy break | [LONG at]
: 1.2540(S) |daily high Mar 1 |take profit, buy break | [1.2388]
: 1.2485(S) |61.8% of 1.2930 - 1.1760 |flat on a failure |
: 1.2465(M) |daily high Jul 19 |flat on a failure |Open|30/09/04

[1.2410] 13:50 GMT FRI 01 OCT : | TIME 11 48|

: 1.2360(M) |spike high Sep 24 |sell stops 1.2355 | |
: 1.2290(M) |pullback lows Sept 29 |buy a bounce |TGT |1.2535
: 1.2240(M) |daily low Sept 24 |buy a bounce |Stop|1.2355
: 1.2225(M) |range low Sept 22 |buy a bounce |
============|==========================|=========================|=============</pre>Looks like we have been here before (Sep 22) A corrective pullback, within a trend, following a significant up day. We are running a long position and are in the money but the risk is building for a deeper fall. Daily studies still have scope to correct and the intraday picture looks to be losing its way somewhat. Will hold the long and maintain stop for now. [12:52 GMT]

edit: orders shunning the EuroFX book before the ISM number ... definitely a move coming here ...

edit2: ... and what a move it was ... :eek: :p
Dip was very orderly - but it could mean we go back to range around 1.23 in a little - but with a big bias for big move up.

Looking at those mini-steps/min-retracements it seems profit taking is at every 3-4 pips ... very careful.

[14:05 EUR/USD: Showing Signs Of Fatigue] Boston, October 1: EUR/USD is easing back below 1.2400 despite a modest dip in the ISM index. Of late, the EUR has tended to rally after US data regardless of the outcome. Now, the process seems to have reversed. Treasures remain well offered and stocks are flying, helping give the buck and underlying bid. Interest rate differentials are adding to yesterday"s gains with Treasuries out yielding 10-year bunds by 21 bp today, from 13 bp at the US open yesterday. Stops below 1.2380 may be in for a test before Europe heads home for the weekend.


edit3: Ooops, almost forgot :eek: - remember it's friday - on the background of a few exhausting weeks - so be extra, extra careful - esp. about trading long durations into the afternoon. :)
 
Ugly chart so far. I'm long from this dip now. It's mostly based on bonds recovering from their dip.

I have a problem with profit taking. That's why I prefer trailing it.
Almost half of the time when I decided taking profits, there were much deeper moves. If I trail them I risk 15-20 pips open profits. Psychologically I feel better trailing it.

Edit: Yes, I think at least I'll take 50% of the profits if we hit 1.2440 today :)
 
I think we're going to run some stops on the low side first ...
Just hope they don't overdo themselves and send us too far down. :)

[14:51 EUR/USD: Real Money Selling Above 1.2400] Boston, October 1: Dealers note selling from a US real money account above the 1.2400 level helping keep the pair from straying too far north. Dips continue ahead of 1.2385/90. Stops are below 1.2380 and may be vulnerable as the day wears on. US equities are flying and bonds remain under pressure, pushing yields higher, a support for the greenback. Resistance is seen at 1.2420 and 1.2440 intraday with options protection selling heavy ahead of 1.2450 exotics.

Scalped +24 pips on 6 trades now. Will be very careful taking on other trades - only if I see really big moves coming up.
 
Quote from Gringinho:

I think we're going to run some stops on the low side first ...
Just hope they don't overdo themselves and send us too far down. :)

[14:51 EUR/USD: Real Money Selling Above 1.2400] Boston, October 1: Dealers note selling from a US real money account above the 1.2400 level helping keep the pair from straying too far north. Dips continue ahead of 1.2385/90. Stops are below 1.2380 and may be vulnerable as the day wears on. US equities are flying and bonds remain under pressure, pushing yields higher, a support for the greenback. Resistance is seen at 1.2420 and 1.2440 intraday with options protection selling heavy ahead of 1.2450 exotics.
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That was right on! What is a "real money account" ?
 
Quote from chinook:

That was right on! What is a "real money account" ?
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Well, as you see market conditions favour taking profits as soon as possible. Running stops has been the theme for many weeks now - and there have been no real fundamental changes to valuation of the EURUSD.

"real money accounts" are asset managers, insurances companies, pension funds etc.

edit: it seems like we're in Pamplona, Spain ...
Just wondering when the matadors are going for the push.

[15:41 EUR/USD: Trapped In Narrow Ranges, With Stops On Both Sides] New York, October 1: EUR/USD has spent most of the US session inside a 1.2385-1.2405 range today and shows little aptitude to break out, since volumes have dwindled rapidly. Short-term spec accounts were selling this morning on the dip to 1.2385, since many knew of the stops below 1.2380. Prices have bounced and stops are now seen between 1.2420/30. On the other hand, there has been significant buying of EUR/USD calls in the last 24 hours, with knockouts between 1.2300/50. Some from the trading community suggest those need to be taken out before a solid rally can develop. There are others that say the option barriers at 1.2450 (sizable) need to be triggered, before any solid gains can be made. With stops on both sides of the market, it"s hard not to imagine a few days of pain is ahead for traders before any new trend is to develop.

edit2: watching the trades and book action it seems it's all about inflicting the most pain on bulls and bears alike. That's gonna keep them from trading ...
Actually I think being able to read the book well in markets like this is a vital necessity. It's either being able or staying out as long as one looks at short term action. Charts and background information indicates a move back to the 1.23-range to me. Some G7 news or event could trigger move to new 1.24-highs, also continued chopping towards the close will make a higher move much, much more likely.

Conversly, looking at the chart - it seems like a "small trend move downwards" - but looking at the chop when US markets opened and numbers were released shows that we are at status quo with regards to conditions the last weeks.
 
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