Posts Tagged ‘Pattern Recognition’
FOREX Trading Update
The FOREX Dollar, as the base currency in which trading occurs in the Foreign Exchange of Currencies, is itself traded as a future in the Chicago Mercantile Exchange. This future, known as the US Dollar Index, is now nearing the end of a symmetrical triangle pattern and is poised at the top of the second rise on the waves of that pattern. Today, it rose, on the daily charts, to the topmost part of its downwards swing line. Yes, it is true; the Dollar is BOTH in a sideways pattern and a downwards trend pattern at the same point in time.
This is why we trade long term, medium, or short term trades–each of them separately. There is not to be a mixup of them. If you want to go for the less profitable, but the one more quick to reward you, then consider the shorter term investment and maybe following the short term downward pattern is for you. If you have a lot of patience and more investment capital (because these investments tend to cover a bigger price range) then you might opt for the long term investment of a year or more that may be much more rewarding financially but will take more time to materialize.
Such would be the case in following the Monthly Charts of the US Dollar Index. The possible profit to be gained here, whether the break is in an upwards of downwards direction, is about 23% over the long haul; if it breaks all the way, monthly speaking. I know this seems like slim pickings for a long term investment of an equity, but we are talking about a currency future and as such, it is less likely to make big moves over short periods of time than a standard stock.
If you’re really looking for BIG action, my next report should interest you. I will be covering the Forex non-US Dollar trading pairs and specific Charts will be shown of FOREX trading in different brokerages on those pairs. We are speaking here of leverage of up to 400 times, getting 400% profit from each specific trade you make. But beware; many trading houses are cheats or con artists and you have to check out the companies well before you invest there.
Anyways, here is the mighty US Dollar. First the monthly chart, or trading method showing the symmetric triangle and second the daily chart showing the current trend.
This is the way the Monthly Chart looks:
This is the way the Daily Chart looks:
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Tokyo’s System Pro-flagging for attention
This is a really easy to write piece. Because, all you have to do is look at the chart and it explains everything. System Pro in the Tokyo Stock Exchange has made 2 flag patterns, one after the other. The first one was bullish and ended, as expected, breaking out to the full height of the flag. The second one, in my opinion, may very well break out BEARISH. This also happens with flags. Which is why I always say “buy at breakout”; that is, immediately after it has finished the pattern or retested for sure the support line. In fact, since the RSI has taken a strong down trend after the 1st flag, I really do expect, with a reasonable degree of certainty, that the flag might break out bearish. Check out the chart below. Also check out the August 2009 Fannie Mae where a similar 2 flag pattern occurred and made a lot of investors from the “herd” lose their pants, or panties.
This is the way the System Pros’ Chart looks:
This is the way Fannie Mae looked August 2009:
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Googles’ cup runneth over
Google, the worlds largest search engine and a whole lot of other things beside, has taken a beating in their battle with the Chinese over censorship. I applaud their firm stance, even though it made them lose ground on the stock market and NOT break their all-time record as seen by many. Their stock prices (candlesticks) have made a very popular sideways pattern called a Cup and Handle. The cup extending from 520 to 570, a little less than 10%, and the resulting target is 620 which puts them near their recent high. This coming true is not a certainty, as technical analysis never aspires to predict the future, only saying that the way things have gone in the past, as is the case with patterns, is the way they will surely go in the future. With the chance being between 60%-70% in your favor. This is the weekly chart that shows the pattern.
This is the way the Chart looks:
