Monday, October 3, 2011

10/3 Forex

EUR/USD has broken below a sideways range that began Sept. 22. On the hourly chart, the breakdown began at Monday’s open -- 5 a.m. Eastern -- and since then the movement has been fairly narrow, but with a second lower low set in the current (8 a.m.) hour.

EUR/CAD has bounced down from the upper 20-day Donchian price channel (at C$1.3986) as part of a series of broad swings: A high of C$1.4378 on July 8, a lower high of C$1.4312 on Aug. 23, and a second lower high of C$1.4131 on Sept. 30. The two lows have been fairly horizontal, straddling C$1.3400.

USD/CAD is continuing the rise that began Sept. 19, expanding the upper Donchian channel. However, today’s movement so far lacks conviction, as it shows a spinning top Japanese candlestick, but one that is trading within the prior day’s range and so fails the test of an evening star reversal pattern.

AUD/USD has dipped below a burgeoning sideways range that began Sept. 23, but has quickly retraced back to within the borders. The lower boundary is around US$0.9628.

See EUR/DKK for an analogous move.

USD/DKK has broken above the 20-day Donchian price channel after 14 days of chopppiness.

What I Track

For the daily charts, I track the 54 currency pairs requiring 20% margin under U.S. government regulations. For the hourlies, I track the dozen most important pairs, with two NOK pairs added in, because they are recently hot.


  • phase: 20-day price channel phase, with green for bull trend, red for bear trend and yellow for neutral trend.
  • trend: Price direction, green for higher highs and higher lows, red for lower highs and lower lows, yellow for neither.
  • adx: Average directional index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
  • 200/50: The moving average cross, green for the 50-day ma above the 200, red for below and yellow for closely aligned.
  • 40/10: The moving average cross, green for the 10-day ma above the 40, red for below and yellow for closely aligned.

About my trading methods

Read a detailed explanation of my analysis method, including trading rules.


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.

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