GBPJPY Elliot Wave 4-Hourly

Rob Lee extends his Elliot Wave forex practical with GBPJPY

GBPJPY Forex: We closed our long positions as we swapped into a bearish tone on our Elliot Wave conclusion as correction took over.

We began with our 139.45 entry and added 138.00 area. We are looking for B (B3 on the chart) to extend up to 3 of the Elliot wave before adding further lots and taking away our Hedged A-B from 4 (A4 on the chart) with a targeted C at 2 (C2 on the chart).

GBPUSD compounding your analysis

Rob Lee of AiMS continues his forex educational blogs with Mastering Elliot wave.

Using Elliot wave on the Daily chart we track 1-2-3-4-5 points (points, not waves) and then apply A, B and C correction. A goes to 4, B to 3 and C to 2 giving us A4, B3 and C2 sequence and targets for taking profits both with and against the trend using a hedging matrix.

Putting it all together, from previous GBPUSD charts in our blog your see how we find entry and now how we exit.

Remember that there are waves within waves, the last GBPUSD action (March 2010) at the “bottom” for example is a 4-hourly Elliot 5 up to the correction which at the time of writing is at A4 of its correction. have a look on current 4- hour charts and see if you can find it, mark it up on a chart and track it.

Mastering Elliot will take you from a run of the mill trader into the world of super returns with clear trading plans and controlled compounding and positional management.

Hint: look for carry trade positions within the waves i.e. pairs that give you roll over fees in a given direction,  AUDUSD long was a very good option recently until its slight bear bias.

Day trading, sentiment analysis

How many times have you been in a trade that fundamental news events say one thing and the market goes the other way, or technicals conflict fundamentals (very common), maybe to help you need to get sentimental too. Rob Lee Forex trader from AiMS gives you an overview of another form of analysis, sentiment analysis.

Many of you will know I’m predominately a technical analyst when on the Forex markets; I will use technicals as my prime analytical device of forecasting, particularly as my timing tool. Add a dessert spoon of fundamental analysis for confirmation (I do my fundamentals mainly on the USA economy when on Forex for obvious reasons) on the larger scene and I’m all set for a day’s trading.

What I don’t talk about often is sentiment analysis, a strong player on the near-term or day trading game. In my usual style I will define sentimental analysis, how we analyze it and how to use it in rational order.

Sentiment analysis, what is it?

Sentiment analysis is a broad area of processing communication channels, text, audio, visual or digital.  In simple terms we are attempting to gauge the attitude of the speaker or writer and their emotional state, or more importantly the emotional state they wish to communicate to their audience, you.

Also, if you are like me cynical, you would assume that whoever is talking / writing also has a motive that may not be in line with the emotional state they wish to produce from the simple marketer who has to write something to push you towards a product (look for masses of twitters and free this and that), a Bloomberg presenter who is paid to talk (a lot) to a release from a company with an invested interest in the markets or their own share price to finally the governmental speaker that maybe voted out of the next election unless his comments are popular. All I’m asking you to do is think about it.

Sentiment analysis, doing it

Analyzing sentiment can be a science or art, computers using “bag of words” software to provide semantic orientation or appraisal theory assessing the variances of emotional reactions to a given statement or event.  You can use statistical, count positive, negative of statements and then tally your results, or linguistics that produces rules and compares the statement to them.

Whatever method you use the goal remains the same, we are attempting to gauge the polarity of the text, sentence or feature and if it is positive, negative or neutral to the market combatants and project this into our forecast and timing analysis as an added confirmation.

Sentimental analysis, using it

Using sentiment, after my initial technical analysis of the near-term (the last move: daily charts) I’m looking for turning points and apply my money management strategy, from there as a cautious trader I overview my fundamentals and look to trade the same way of the last known fundamentals (also looking for early turns in technical’s for unknown fundamentals too, that’s another story) , as sentiment statements enter the data stream I begin counting positives and negatives and scan the feed for key phases or sentences along with who’s saying it and I think about why they are saying it. All fall into line and trading operations begin, if something is off set I do what a good trader is paid to do, wait, re-analyize, check and double check.

The old saying “There ain’t no such thing as a free lunch” is an important quote to remember, humans by nature have their own goals, amplified by the fact you are in the market with some of the most capitalist, competitive, skilled and cunning people on the planet who will and do everything possible to make money, their communication with you is important and you should take note.

Take care in the information you receive, analyze it: who, why, when, positive, negative, effect

The British Pound is going up on Monday, join my free online dating website here >>>

Rob Lee

Senior Analyst Arriba Capital off-shore

Consultant Analyst and Investment management school London

What is Financial Spread Betting?

Financial Spread betting is one of the most exciting and fastest growing ways of speculating on the movement of an underlying share or index and for many investors it has become a flexible and cost efficient alternative to trading ordinary shares.

Advantages of Spread Betting

* No Stamp duty is payable (saving 0.5% compared to a traditional share purchase.

* Tax Free Profits: Profits on spread betting are not subject to capital gains tax.

* No direct commissions or fees are paid to the spread betting company.

* You can profit from falling or rising markets.

* They are traded on margin therefore bets can be placed with a relatively small initial outlay.

* A single account can give you Access to far greater range of financial markets.

* You can limit your risk using a “Stop Loss”.

* The ability to place very small bets, some companies let you place a trade of as low as 1p per point.

* Tax Laws are subject to change.

Drawbacks of spread betting

Financial spread betting is less suited to the long term investor,if you hold a bet open over a long period of time the costs associated increase and it may be more beneficial to have bought the underlying asset. You have no rights as an investor, including no voting rights and you will not benefit from dividends.

From Rob Lee of AiMS Trading Club and Forex training courses

London Hertfordshire Bedfordshire Cambridgeshire UK

EURUSD on target

From AiMS Forex Trading Club London, Hertfordshire, Bedfordshire, Cambridgeshire and Buckinghamshire.

The EURUSD hit our target set on Saturday well at 3645, this morning we expect a decision after yesterdays climb, a retracement before.

Usable chart here

EURUSD and GBPUSD

Hedging Matrix in place, monitoring the local term trends now for continued direction.

EURUSD Intra-day

Interesting Hourly close on the EURUSD in the 3445 area, hourly gives us a slow progressive high low on hourly’s. Tentative Entry on low lots in place.

GBPUSD Corellation

massive divergency GBPUSD vs USDCAD on corellations, Weekly -72’s against an hourly 42 and daily -53, GBPUSD way below Moving averages as USDCAD holds around them (Dailys) divergency trade as GBPUSD tries to find its average and re/establish the larger correlation.

EURUSD Swing Signals

EURUSD still no Daily close below 3505 (see chart), any bull on the near term (hourly-4 hourly) below this level will be entered http://www.aimschool.co.uk/market-analysis/2010/02/eurusd-key-intra-day-signals/

EURUSD – Key Intra-day signals

From Rob Lee of AiMS Forex Trading and Training Club London, Hertfordshire, Bedfordshire, Cambridgeshire and Buckinghamshire.

Defining a trend in Forex futures

When we talk about technical analysis and in particular trends we need to define the trend and the  time frame we are working within. For most futures traders we look at 1 year to 6 months as a major trend, approximately 6 months for our intermediate trend and the last 3 weeks for our near term trend, this is my first port of call and background to any trading including intra-day.

Common sense would be applied in buckets as we analyse a chart, and recent times are no exception. With the credit crash relative to today’s price action, as an analyst I am looking at the credit crunch crash as my major trend, all movements are within its frame.

Any movement in the intermediate trend is relative to the crash as we attempt to recover, the intermediate trends show us the attempt to rally back to where we have came from. The rally after the crunch lows gave us our intermediate trend within the crunch and we can gauge direction as levels are achieved. As intermediate trend changes direction as the EURUSD has done from rally to decent (a retracement of a retracement) we can use the Major trend analysis to find its target and points at which larger decisions are made.

The near term in turn provides us the intermediate trends “mood” and we use our near term analysis for intermediate swing trading timing. Not unlike Russian dolls trends develop in the lower trends and grow into the next larger trends direction, by using this method we can gain early insights into direction and our situational awareness of key levels of price coming into play is very keen.

Like Russian dolls there are trends within trends and I cannot possibly explain them all within a blog (this is to long already), If I said that trend Major, Intermediate and near term can be transported down into a trend of a trend it may make more sense.

An example could be an Intra-day trader moves his Major to the last 3 weeks on daily chart and moves into 4-hourly and hourly as his intermediate and near term respectively. Key is to look at the last trend move that engulfs your trading area and work in from there, as it breaks the major support and resistances move out in time frames and trend.

For you guys I have made it very simple and coloured them, Red refers to anything related to the major trend (the crash), blue the intermediate (retracement of the crash) and green our near-term (trends of the intermediate).

Technical Analysis Forex EURUSD

3505 (B) gives us our lowest daily close as the EURUSD daily as intermediate trend continues its decent reaching the Major 33% Dow theory line (red 33) from our credit crunch crash Fibonacci and Dow frame.

Price fell from the 76.4% of the same major frame, paused for retracement at the 50% climbing to 61.8% Fibonacci decision point before continuing pushing the 50% revisit aside and crashing past 38.2% to just under the 33% clearly showing the Euro-dollars weakness against the United States Dollar. See chart

Near term analysis gives us levels to consider for any change in the intermediate, we must see a daily close below 3505 (B) before absolute support at 3450 (C) can be broken, 3450 has two attempts should clearly on 4-hourly charts and give near term trend a sideways.

Conversely at the top end of the near term 3645 shows two attempts with spike downs on both. 3645 is taken as the last 4-hourly higher high and Dow theory states a newer high must be established followed by a higher low for this current down trend to be turned around near-term leading into a intermediate term change in direction.

Intra-day trading is made difficult, as the bear-bias shown on 4-hourly charts is ever so slight and really pronounces we are sideways with bear bias. An obvious conclusion given where we are on the major trend (38.2% / 33% red) decision area.

a close below 38.2% for Fibonacci gives a sell signal to the positional/swing trader who normally have much larger clout then day-traders, switching a daily close above would signal and up-trend. See chart

Intra-day tactics

Tactics: Intra-day tactics would be scalping for very small points (10-50) off the major and intermediate using the near term Fibonacci (2 purple) and pay special attention to Near-term 61.8% (1) as an early warning to future larger moves.

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