GBPAUD - "on the next day" - part two

GBPAUD - "on the next day"

The trade entered after second Bearish Divergent Bar (look here ) moved strongly down taking furiously all signals generated on the way. Nevertheless Acceleration is slowing there is a good chance to hit 78% Fibo level (what about 100% level?)

We have to look for new signals soon...

GBPAUD Bearish Divergent Bar Trade

It was hard to turn down the strong up move in GBPAUD 4 hour chart.
As seen on chart 1st Bearish Divergent Bar failed to break the up move and stop loss was hit.

The new rush to the top failed again, forming a new Bearish DBar and Triple Tops. All three Bullish Fractals did not have been taken.

Fortunately the strong resistance pushed price down hitting one after another each sell stop orders.

It seems that the bottom of this impulse is about to end around 2.40 level (if nothing steams additional down move).

How to benefit without Divergent Bar

Not all moves form Divergent Bars signaling us for change in movement direction.
A sample is USDCAD 4 hours chart here. The lack of Bearish Divergent Bar cannot stop trader to make some profit.

The long down side move has stopped for a while ranging in a narrow path. Yesterday attempt to break down this range was unsuccessful, but formed a Bearish Fractal signal. This and previously two taken fractals have to sharp our attention. This decision was supported by Bullish fractals going in down direction too; last one failed taking 1.0885 level.

Using Balance line signals I've put few sell stop orders - just in case. It doesn't seem to me that the down move could continue. Today we see that trader have to obey signals!

Stop Loss is moved below last order so I'm in a free trade now waiting for more signals.

Why not?!

When Alligator wakes up

On USDCHF 4 hour chart we can see the long sleep of the Alligator (light blue rectangle).

"... the longer it sleeps the hunger it gets..."

Here we can clearly see this in action ;-) More than 20 sessions price has gravitated around 1.2280 level.
We've got two Bearish Divergent Bar signals which seemed (before diving) weak and accidental especially first one.

But the strength pumped during the sleep exploded and if trader has not set its buy stop orders would probably miss at least the first entry.

Last bearish DBar was also signaled by bearish divergent into the Acceleration (up in price while strong down in AC)

"... we take all and each signal after the first fractal break..."

With green are marked all sell order signals on this steep down path.

USDJPY Bearish Divergent Bar Setup

It seems a Bearish setup is formed:

We can see the new Bearish Divergent Bar having an acceptable angle. Additionally it is supported by Acceleration decline. On the other hand previous rally failed to take the Bullish Fractal forming Double Tops.

These double tops in turn formed Bearish Divergence with the Momentum.

These formations are confirmed on daily and weekly chars where double / triple tops are formed.

USDCHF Bearish Divergent Bar

USDCHF Bearish Divergent Bar formed few days ago faded quickly.
It seems that the bear strength is not so powerful at the moment to support this down move.

This weakness is clearly visible on the daily chart where
Bearish Fractal was not taken last few days even cannot cross the pick line...

Anyway in this vague move it is better to say out of trade. This decision is supported by the Alligator's behavior on 4 hours chart where it is going to sleep at least for a while.

So we'll keep an eye on the Bullish Fractal about 1.2360 and wait to see what will happen.

EURCHF Bearish Divergent Bar Trade

The Bearish Divergent Bar gave a chance to collect a nice profit trading it down.
Green Lines are entry points - fortunately there were lots of them giving us an opportunity to add aggressively to the trade increasing the profit.

At the end of the move there was formed a Triple Bottoms formation which closed above the pink line causing the close of the trade.

On Daily chart we can see that this down move caused the Alligator to be sleepy which have to keep us aside for the moment enjoying the profit.

GBPJPY - great opportunity

Alter about one week drifting Alligator got up and started eating whatever it found around his nose.
Once woke it took nearest Bullish fractal and formed immediately few more signals allowing to add more until accelerating.

As the Momentum shows this move was long enough and trader is not recommended to add more on the ground of Green Zone.

It seems to be time to collect profit and to look for the next opportunity.

At the moment it seems that the opportunity comes with a Bearish Divergent Bar. Perhaps movement turn doesn't looks like a high probability option but looking around we could find also other arguments supporting at least a consolidation of some sort.

One is seen as a Double Tops on the weekly chart below. This is one of the possible scenarios. Other is the power steamed so far to result in a break up...

We'll see. Important is to keep loses small and to lock the profit (Easier to say than to do!)

Divergent Bars Day - Part 2

The begging is of the story is here ...

Let's see what happened:

EURCHF:

Steep and fast rally formed a Bearish Divergent Bar resulted in a slower consolidation. Down move was much slower and formed a Bearish Fractal.
This opens an opportunity for adding to the trade.

USDCHF:

Acute Angle though this Bearish Divergent Bar trade was closed by hitting stop loss causing small loss.
It seems that up move has still power and could blow into a new rally. These slowing momentum and acceleration did not result in breaking the last bearish fractal - Bulls are still strong enough ;-)

GBPCHF:

This consecutive Bearish Divergent Bars failed one after another approving that the distance between the price and Alligator's line have to be substantial.
Acceleration was hesitating around the zero line and Momentum was sometimes up - sometimes down but also gravitating around the zero.
Nevertheless the angle is acute the distance between the price and MA lines is small.

Last bearish fractal was not hit but taking the Bullish fractals helped to acceleration giving few adding signals. Traders that had jumped on successfully will enjoy a nice profit.

Some others samples of Divergent Bar:

Here we have also

eurgbp

Bearish Divergent Bar was the natural end of Alligator's lines intertwining and a ground for a new down move. Here DBar was the confirmation of the movement turn from up to down.

Excellent adding point are clearly visible.

USDCAD

This Bullish Divergent Bar took lots of sessions until taken forming meanwhile two Bearish Divergent Bars. Once taken its stop loss had been his almost immediately accelerating down taking on the way both bearish fractals..

Divergent Bars Day

There are plenty of Divergent bars formed today on different pairs. Here are some of the charts.
(Story continues here)

USDCAD New week (#21 - 21 May 2007)

USDCAD New week (#21 - 21 May 2007)

This pair continues its down move taking the subsequent Bearish fractal.
It also shows a good example of invalid Bullish Divergent Bar. One of the conditions DBar has to met is acute angle during its formation. Instead we see here two parallel lines.

This is also support by the Double Bottoms break on weekly chart.

New week (#21 - 21 May 2007) EURUSD

EURUSD is ranging from Thursday taking twice the bullish Divergent Bar and hitting once the same DBar's stop loss.
On 4 hours chart and Daily chart it formed Double bottoms failing to continue down move.

From this point of view it seems more probable to continue in up direction (supported my the positive Momentum and Acceleration), while moving forces muster strength.

If trader is on the long side - tighten the stop and keep in mind that market is in the Green Zone but in the same time there are two bearish fractals to be taken.

We've got additional Buy signal from the two consecutive green AC bars. Bullish Divergent Bar is supported by 3 green AO bars - signal to add to the long side.

EURUSD - Up or Down?

As fast the rally during 11-16 May was, the distance was covered back even faster and price with almost where it started.

This fast up and down move created a small puzzle for us - which way we have to chose? On the one hand we have bearish fractal and a retracement move on the daily chart where it does not seem to be at the end. Also the most recent Bearish Fractal has been easily taken.

On the other hand we have a Bullish Divergent Bar (tonight another one was formed) supported by upward acceleration and the inability even to touch the recent bottom. The strong down impulse that took the last Bearish Fractal seems to be already out of power.

If I decide to enter the market at all I'll follow this approach:

Will take the last signal as the most valid one and will place a buy stop order ( green line ) above the high of the DBar keeping a tight stop loss ( red line ).

Another sell stop loss will be placed below the lower Bearish Fractal again with a tight stop loss.

This way wherever the market takes on I'll be in.

Of course there is a risk market to enter a range and both orders to be opened and stop loss to be taken one after the other...

Well here is a point where no one tool could help, but your own mind. Before placing the orders trader must answer the question 'Am I ready to take this loss?'

Totally flustered (GBPAUD)

(see another point of view at
What the news can do? (GBPAUD)

The news yesterday totally disordered GBPAUD.

Here on the 4 hours chart is visible the levels where Bullish Divergent Bars appeared. The 1st attempt was killed by bears, 2nd totally failed, fortunately with small losses. 3rd one seems again to be killed by bears, despite of yesterday news support.

On daily chart the break of Double bottoms was supported by the same news.

Nevertheless the Bullish Divergent bar on daily chart, looking at both charts we've got so many heterogeneous signals that for me staying away seems reasonable.

Time to leave

One cannot trade all the time - otherwise how will enjoy the profit?

This is what traders have to do now (only my opinion ;-) - take your profit and enjoy it.

Looking at the EUR-GBP 4 hours chart it is obvious that trade have to be closed and profit collected.

Why?

• The alligator is fed up and is going to nap.
• Gator is closing.
• There are at least two close below the pink line.
• Too many fractals in opposite direction

In short - look on another place.

Let's take a look on the daily chart for a moment.
There is also signals in opposite directions:

Possible Double Tops and Bearish Divergent Bar versus almost a week Acceleration and Up momentum. But the upward move is too steep forming a bearish angle...

SO the daily chart just confirms what the 4 hours one is saying - look at another place!

Let's enjoy the profit!

What the news can do? (GBPAUD)

Starting from 14 May (you may refer it here ), lately confirmed by Double Bottoms, this Bullish Divergent Bar setup was unconvincing gravitating around 2.3730 level. The angle, presented though, was not very acute. Stop Loss below the Dbar has been almost hit - just few more pips are the order would be closed.

But it is well known that "the longer the range is, the more far away the move will be".

Any way pip by pip the move was on.

On this 4 hours chart with green lines are marked entry points issued by Chaos Trading System. As seen first few are close one after another. The the 38.2 level was tested and the next bar is The News Bar - move up was as high as the previous six session bars!

Even this strong impulse didn't help taking 61.8 - 78.6 level (you can see it just on the left of the red angle lines).

This is why Stop loss was positioned just below 61.8 level. Any way there are two more buy signals - a fractal and momentum (AO) and two pending orders have placed accordingly

The steep move, supported by Double tops and strong 78.6 resistance level from current point of view might form Bearish Divergent Bar. On daily chart the price just touch the pink line which also could act as a resistance.

On the other hand Accelerations is very strong and momentum on 4 hours chart just crossed zero as a result of this acceleration and after taking a breath could continue.

How up? - EURGBP

On the 4 hour chart we see Bullish Divergent Bar followed by a nice rally. Up move has offered few more entry points where aggressive traders could add to the position. EURGBP toke the distance of +65 points on one breath. Signals are coming one ofter another under a strong Momentum and Acceleration.

At the moment there are two open long positions and another two pending if market moves up.

On Daily chart though we have two Bearish DBars that show us possible end of the trend. The angle is acute and even if the up move keeps going up the lack of Momentum and Acceleration will end the trend if no other circumstances appear. So the Stop Loss is tighten and armed with patience we'll wait to see what the market will decide

EURCHF - to continue or not?

EURCHF seems to break double top...

Starting up move direction on 11 May with a Divergent Bar, there was a nice rally offering few entry points and good profit (Lower green lines labeled 1-4).

After the deeper than expected (and desired) reaction there was another series of entry opportunities (green lines above Stop loss line labeled 1-5). Nevertheless distance is shorter than previous one - profit opportunity exists and the break of the top could make it bigger.

On the daily chart is clearly visible Bulish fractal break.

Here (daily) momentum is considerably slowing but acceleration is on. If latter continues we could see another rally. Next session will show the way.

GBPUSD Divergent Bar trade

This is a trade that was fired after yesterday GBP news - surprisingly for me, but fortunately profitable ;-) .


Bullish Divergent Bar was followed by a strong rally and side move ended into Bearish Divergent Bar.

These to many moves in opposite direction (result fractals are seen scattered around) make me to close the trade and to lock the profit.

For the moment there is a short term sell and a long term buy signals so appropriate stop order should be placed around to catch the move (if any).


On the daily chart is visible the possible break point if up move continue and an possible entry point is marked with a Bullish Fractal.

We'll see what the market has in mind next sessions...

EURJPY Divergent Bar trade

At the end of today US session EURJPY issued a close signal in form of a Bearish Divergent Bar.

This Dbar was the point of a profitable trade started by another Dbar - in this case Bullish, formed on 11 May.

The beginning of the trade was preceding by a loss trade, fired by taking a Bearish Fractal. During the strong Bull attack Stop Loss has been taken and a reversed Buy stop order has been fired.

Green lined (1-4) show the adding orders as follow: Entry
#1 - 1 lot at 161.75
#2 - 5 lots at 162.80
#3 - 3 lots at 163.20
#4 - 2 lots at 163.26

Stop loss fired at 163.45

Besides the Bearish Divergent Bar exit is supported by Double Tops formation on daily chart. There is seen there also a Bullish Fractal so a Buy Stop Order is placed above it and a Sell Stop order below the Dbar on 4 hours chart.

This way the profit so far is locked and the door for a new move is opened...

EURGBP Bullish Divergent Bar sample

These days EURGBP formed a very clear Bullish Divergent Bar sample on 4 hours chart.

We have three Bullish Divergent Bars; Middle one closed quickly; lately followed by the first (most left) one. Nevertheless these loses another DBar has been formed few sessions later giving us another entry point.

Because for the fast rally after entry point on last DBar (green line #1) two more Buy Stop orders have been placed on the previous DBars (line #2).

There was a critical moment after these order has been added because market turned down forming a bullish fractal fortunately followed by a bearish one.

Another 5 lots Buy stop order has been hit when bullish fractal has been taken (line #3). This coincide with the 3rd green AO bar supported by great acceleration.

Adding was stopped for we currently have 5 consecutive green AO bars. That means that if no other fresh signal appears, market probably gets near to the top and a sideway or direction change will occur.

This is why the stoploss is tighten just below the Low of the last bar.

EURAUD H4 setup

We have a posible setup forming these few hours on EURAUD 4 hours chart.

From May 11 we have small range move while market hesitates where to go. AC rotates around the zero line.

This breath gives us time to analyze situation and to decide what to to next.

There are two bullish divergent bars and two bearish down fractals formed during last few sessions.

AO was red below Dbars and now shows 3 green bars which signals for a moment to add to the trade.


On the other had we must be prepared for a turn down and some continuation of the previous direction (down).

On the daily chart we could see currently forming Double Bottoms backed up by strong acceleration and momentum crossing below the Zero line.


On the weekly chart we could clearly see the debate between Bulls and Bears around 61.8% level.

Bears had four unsuccessful attempt to break the support, but Bulls had pushed them out. As a result both Momentum (AO) and Acceleration (AC) have turned into Green Zone.

Divergent Bar Sample on EURUSD 4 hours chart

Here is an sample of Divergent Bar recently formed on 4 hours chart of EURCHF.

On 8th and 9th May we see two consecutive Dbars. Last one (9th) was triggered first and almost immediately was stopped (on the next bar).

The up move triggered the 1st DBar. Sideway move formed a down fractal and a little later another up fractal taking away Divergent bars stop loss.

Both up fractals are not triggered still.

Down fractal was taken giving us a profit of about 75 pips. This new down move was ending in another couple of Divergent bars forming more acute angle and almost immediately triggered. These Dbars were supported by AO generating 3 consecutive green bars - a signal for adding to the trade.

GBPAUD - Divergent Bar on 4 hour chart

Promising though (look here, here, here and here) GBPAUD is hesitating where to go.

Nevertheless it was profitable, last Bullish Divergent Bar quickly kick us out of the market.

For compensation we'd got another setup promising to be stronger (this is just a hope).

So fast as market consolidated up to 78.6 level was down retracement ending in Double Bottoms and a new Bullish Divergent Bar.

This new DBar is supported by:

• red AO bars;
• very little accelerations in opposite directions and;
• an acute angle toward red line (Alligator's teeth).

Additional support it gets from the Daily Chart where again we see a Double Bottoms (not fully completed yet) formed after testing 50% up level.

There is no momentum at all though we see acceleration in down direction.

From here on, most probable is, market to move up or down rather than to move side-away (this is just one possible point of view).

GBPUSD

After breaking Head & Shoulders formations few days ago, GBPUSD seems to form a Bullish Divergent bar setup on 4 hours chart at the end of today USD trading session.

Four attempts to break 1.9750 level ware made in vain and they result in forming two Bullish DBars. The setup seems to have a good angle while AO shows red bars. Last two bars are green, so we'll wait for the 3rd green bar to add to the Dbar entry order.

Even if price does not break upper channel (about 2.00 level), there is a good potential for profit.




On Daily chart consolidation channel is clearly seen:



Acceleration down is slowing; momentum is around Zero line. Alligator is closing.

Down move has touched 38.2% Fibo level. It seems like a Wave 4. If Dbar continues up this could be labeld b-c wave.

Nevertheless now it seems reasonable perhaps, we have always take in mind that market will decide where to go and we must be prepared for any direction (including sideway ;)

GBPAUD

GBPAUD was king enough to hit the guessed target

Now the question is will 2.38 level be broken or an up move will start?

GBPAUD

GBPAUD shows us today a great educational example and a ground to test our analytical skills ;-)

I do not believe that the average human been is capable to predict anything in the future but using some of the common tools we could create an interesting point of view (of course not the only one possible...)

So here is the fresh chart:


Colorful, isn't it?

The tools I've used are Fibonacci Retracement & Expansion added to the chaos usual tools. There are two retracement start points available: First from the beginning of down move (red lines) - the two divergent bars at the top of the chart; and from the last up fractal (magenta line).

Expansion is light blue line with 61 and 100 levels.

If the up move continues (seems to be most likely: market has to rest from this deep diving) the possible target will be 78 level from 2nd retracement to 61 level of 1st retracment. Support for such idea gives us the touch of 100 level of expansion.

We have double bottom formed on Daily chart. This also support the up move point of view because before to break this level (if at all it does it) it will need some acceleration from an upper level.

We'll see...

GBPAUD Daily chart

Continuing observation of this move I've to notice that on daily chart price is forming double bottom (no yet finished).

There is probability this down move to break down the lowest fractal formed about 20 days ago forming the 5th (if counting is correct) Elliot wave.

Depends how strong the support around 2.38 level will be.


If break occurs another move down could be expected as seen on the monthly chart below: