Tuesday, October 4, 2011

10/4 Forex

On the daily chart...

AUD on a downward track, with AUD/CAD piercing the lower 20-day Donchian channel, AUD/SEK pushing the lower channel boundary lower, and GBP/AUD the upper boundary higher, for a fifth straight day, and AUD/USD continuing its decline below a seven-day sideways range.

USD/CAD continues its rise that began 10 trading days ago -- it was interrupted by one, three-day correction. CAD/DKK has executed a nice bounce off the lower Donchian channel, although the follow-through seems to be weakening at this point in the trading day.

NZD/USD continues a fifth day of decline that is pushing the lower Donchian channel boundary still lower.

On the hourly chart...

EUR/USD has traded essentially sideways since 5 p.m. Eastern on Monday, with the exception of a sharp decline at the start of London trading. The decline from Sept. 28 (at US$1.3689) stalled at the bottom of a high-low channel that began Sept. 15. A multi-hour drop below the channel -- now at US$1.3165 -- would suggest continuation of the decline. A persistent break above US$1.3226 -- the high of current sidewinder -- would suggest a reversal of the decline.

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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