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| CADJPY - Renko, Ascending Triangle |
Tuesday 13 May 2014
CADJPY - Buying the ascending Triangle
I hope... and I hope this will be a quick trade. A nice ascending triangle was formed on CADJPY renko and the resistance was broken, tested and this pair looks ripe heading towards 95.536.
Combining Renko and Candlestick charts
Renko charts are great in terms of understanding what price is doing minus all the price spikes or wicks we get to see in Candlestick charts. However, a confluence between Renko and Candlestick charts can be a great way to gain confidence in a trade.
In this article, I present the USDJPY trade idea which combines renko and candlestick charting. Readers might know about a bearish call made on USDJPY here. Nothing has been changed on the analysis.
To summarize:
In this article, I present the USDJPY trade idea which combines renko and candlestick charting. Readers might know about a bearish call made on USDJPY here. Nothing has been changed on the analysis.
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| USDJPY - Renko Charts - Bearish Flag |
To summarize:
- A major triangle was formed, which gives a target to the upside breakout at 106.864
- Price rallied 3/4ths only to reverse and start making lower highs (figuratively) and higher lows, indicating consolidation taking place
- During the process a bearish flag was formed, where the high of the flag managed to kiss 61.8% of the most recent leg to the downside.
- The bearish flag gives a target to 98.303
- I suspect a retracement to 38.2% at 102.657 before price drops lower.
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| USDJPY - Candlestick Charts |
- On the candlestick charts, we notice a triangle pattern set in place
- When measuring the previous leg up, we see a retracement to 50%
- We also notice what seems like a head and shoulders pattern being formed. If this holds, it gives us a downside target to 99.108
- Price shouldn't head to 102.657 and should reverse and move into the median line.
- In such an event, we can short USDJPY at 101.635 with stops at 102.657
- Trades could be moved to break even at 100.965 and book partial profits at 100.23 and 99.1 and finally 98.3 with stops moved to 100.23 to make the third trade risk free.
Wednesday 7 May 2014
Trading made simple with Renko Charts (G-X Norway ETF Example)
Thought of making a post every now and then which shows how simple and stress free it is trading with Renko Charts.
Here's the G-X Norway ETF
I know in hindsight things look easy, but let's ignore the entire leg of the renko brings and focus on leg 1.
We see a strong trending market and then a series of down (red) reko bars. Plotting using the Fib tool, we get 14.25 as 38.2% retracement level. The first retracement fails to retrace to 38.2% and rallies, only to make a lower high, indicative of a losing momentum. This would have been the first signal. After a small pullback to the decline, we see a continued downtrend... and where does price retrace to?? Voila 38.2% of the leg 1 at 14.25.
Price then rallies until it makes a lower high. So we plot the next leg with Fib. The retracement here was quick and swift, with price reversing bang at 61.8% Fib, 15.26. Further confluence comes from the trendline holding.
Sure, between 14.25 and the drop to 15.26, it would have been just a 7% growth compared to the peak of 18%. However, with a bit of patience and objectivity, a trader could have purchased again at 15.26 thus increasing their equity even more.
Goes to show how simple it is to trade with Renko charts.
Interested to learn more about Renko? Click here.
Here's the G-X Norway ETF
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| Renko Charts - Price Action Case Study |
I know in hindsight things look easy, but let's ignore the entire leg of the renko brings and focus on leg 1.
We see a strong trending market and then a series of down (red) reko bars. Plotting using the Fib tool, we get 14.25 as 38.2% retracement level. The first retracement fails to retrace to 38.2% and rallies, only to make a lower high, indicative of a losing momentum. This would have been the first signal. After a small pullback to the decline, we see a continued downtrend... and where does price retrace to?? Voila 38.2% of the leg 1 at 14.25.
Price then rallies until it makes a lower high. So we plot the next leg with Fib. The retracement here was quick and swift, with price reversing bang at 61.8% Fib, 15.26. Further confluence comes from the trendline holding.
Sure, between 14.25 and the drop to 15.26, it would have been just a 7% growth compared to the peak of 18%. However, with a bit of patience and objectivity, a trader could have purchased again at 15.26 thus increasing their equity even more.
Goes to show how simple it is to trade with Renko charts.
Interested to learn more about Renko? Click here.
EURNZD - Waiting for the retracement
Today's RBNZ Wheeler expressed concerns of the appreciating Kiwi Dollar. Against most of the pairs, the NZD has been weakening. The EURNZD offers a good trade, besides the fact that EURNZD shorts also attract positive overnight swaps.
The chart below depicts the trade idea. It might seem a bit confusing but its quite simple. Just follow the explanations based on the markers.
1. A triangle pattern is formed which was validated by a downside break out. The triangle gives a target to 1.5229. The break out failure is to be seen as a retracement that usually happens to all break outs.
2. I plotted a mini AML and the retracement looks to end at 1.6278. Typically prices tend to deviate after hitting the median line (and not to forget that prices hit the median line 80% of the time).
The level of 1.6278 sits right between the 50 - 38.2% retracements of the major leg down and the minor leg down. This gives us a reversal range between 1.6488 & 1.62324 and 1.6278 sits right in between these two levels, which if you look to the left has formed interim support during past rally and looks set to act as resistance to this short term rally.
3. The very light AML gives the long term picture. Price failed to reach the median line indicating a change of trend.
Putting it together, we can take a short positioon at 1.6278 targeting 1.5229. For stops, above the break of the trendline from the major AML at 1.6698 gives a total RR trade of 2.5, with the potential to make 350 Pips.
The chart below depicts the trade idea. It might seem a bit confusing but its quite simple. Just follow the explanations based on the markers.
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| EURNZD - Renko Chart, Trade Idea |
2. I plotted a mini AML and the retracement looks to end at 1.6278. Typically prices tend to deviate after hitting the median line (and not to forget that prices hit the median line 80% of the time).
The level of 1.6278 sits right between the 50 - 38.2% retracements of the major leg down and the minor leg down. This gives us a reversal range between 1.6488 & 1.62324 and 1.6278 sits right in between these two levels, which if you look to the left has formed interim support during past rally and looks set to act as resistance to this short term rally.
3. The very light AML gives the long term picture. Price failed to reach the median line indicating a change of trend.
Putting it together, we can take a short positioon at 1.6278 targeting 1.5229. For stops, above the break of the trendline from the major AML at 1.6698 gives a total RR trade of 2.5, with the potential to make 350 Pips.
Monday 5 May 2014
USDJPY - Bearish Flag on Renko
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| USDJPY - Bearish Flag |
Looking to sell USDJPY on retest of the bearish flag, targeting 98.3
GBPAUD - Head and Shoulders, Renko Chart
This should be a nice trade to take on with a good RR as price retraced back to the H&S neckline. Target is set to 1.75 and stops at either of the shoulder's highs.
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| GBPAUD - Renko Charts, head and Shoulders |
Saturday 3 May 2014
Update on trades taken in April
Sugar Futures: Past analysis here.
Adding a pending sell order just below 16.76 and moving all trades to BE at 15.50
AMD: Past analysis here.
Still waiting for price to break out of the triangle.
Coca-Cola: Past analysis here/
Cover longs to break even on a new green renko brick closing above 41.02. Target can be either a nice number of 45.5 or 45.6.
CVX: Past analysis here.
Revising target from 138.5 to 130.2. Moving all long positions to break even + a few more points.
MAC: Past analysis here. Price managed to rally quite a bit but currently sits in at the expected resistance level 65.63.
Expect a few retracements to this rally. Target is revised to 74.62. If retracement holds, then upon a bullish brick being printed post retracement, add to positions.
SPLS: Past analysis here. Nothing much has changed ever since. Price has managed to move just a little bit higher. So still waiting for price to reach 14.39. Although I wouldn't be surprised to see a reversal near the region of 13.
And all the ideas posted using Elliott Waves.... not bothering to update them. Consider them invalidated.
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| Sugar Futures - Renko Chart, 03/05 |
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| AMD - Renko Chart, 03/05 |
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| Coca Cola - Renko Chart, 03/05 |
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| CVX - Renko Chart, 03/05 |
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| Macerich - Renko Chart, 03/05 |
SPLS: Past analysis here. Nothing much has changed ever since. Price has managed to move just a little bit higher. So still waiting for price to reach 14.39. Although I wouldn't be surprised to see a reversal near the region of 13.
And all the ideas posted using Elliott Waves.... not bothering to update them. Consider them invalidated.
EURUSD - Hitching a ride
In the previous article, I mentioned about EURUSD targeting 1.40. In this analysis, we'll see how we could hitch a ride on this short journey.
Keeping the analysis as is and taking cues from the triangle break out, we notice a bit of retracement taking place. The most likely dip could terminate near 1.3776, which incidentally was a past resistance level. This was tested just once more recently and is likely to be tested again, thus providing a good entry.
The validation for longs also comes from the trendline confluence with 1.3776 level. So the stops would come in at one and half bricks below at 1.3651. The target of course would be 1.40 and 1.4082.
So taking two positions with the first one closing at 1.4 and the second position moved to BE and targeting 1.4082 from 1.3776 should play out fairly well.
Keeping the analysis as is and taking cues from the triangle break out, we notice a bit of retracement taking place. The most likely dip could terminate near 1.3776, which incidentally was a past resistance level. This was tested just once more recently and is likely to be tested again, thus providing a good entry.
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| EURUSD - Renko Charts, Trade Plan |
The validation for longs also comes from the trendline confluence with 1.3776 level. So the stops would come in at one and half bricks below at 1.3651. The target of course would be 1.40 and 1.4082.
So taking two positions with the first one closing at 1.4 and the second position moved to BE and targeting 1.4082 from 1.3776 should play out fairly well.
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