Comparing Swing Plays on the $EURUSD

• ragheehorner
• October 22nd, 2009

Trend following has and always will be one of if not THE most popular trading strategy.  But to say that people are using this strategy in a TREND is another thing.  As I always say, the only thing I can honestly share is the way I look at the market so here’s my view of two intraday time frames on the fiber.

So if I am going to employ a trend trading strategy it just can’t be applied haphazardly!  There must be a tool I can use to consistently identify what the current market cycle is on the specific time frame I am setting up to trade.

I’ve been playing both the longer term and shorter term $EURUSD which for me means that I am trading the 240 minute and 15 minute chart.  If you have been following me on Chart.ly you will see that I will use the five minute chart to get an up-close view of action neat pivot levels.  My trading charts are the 15, 30, 60, 240, and daily.  The 30 and 60 minutes charts have quite frankly been giving me fits this week.

The 15 minute chart is heading higher in what I call a “12 to 2 o’clock” angle.  So since I have a confirmed uptrend on THIS time frame I can now begin to determine what would be a sufficient pullback to buy into.  The ENTRY will feel a little uncomfortable since it is buying into short term weakness but remember that you’re BUYING INTO an overall trend.

The pullback here would be most simply at the 34ema high since that’s the first support level provided by the 34ema Wave.  Alternate support levels could be determined by Fibo level or pivots…the point is that there is NO SINGLE SUPPORT level that is THE correction of the trend!  Use your own tools to determine what you are comfortable buying into.

On this time frame the validity of the uptrend is defined by the angle of the Wave and the support of the 34ema low.  Below the 34ema low the correction has turned in to a reversal ON THIS TIME FRAME ONLY.

So let’s take a look at the 240 minute chart.

I left his chart unmarked…what I want you to see is the angle of the Wave, the amount of data I have on this chart (a 240 minute chart needs four to six weeks for a proper lookback), and where the support would be on a correction.  Again the easiest is the 34ema high which is currently at 1.4965.

Since the 15 minute chart shows that there is resistance between 1.5030 and 1.5050 there is a chance that if this hold, prices could head lower during the Asian session and set up the correction I am looking for.  Also consider that the 15 minute chart not only triggers first so it’s a more aggressive entry but it also has less risk as compared to the 240.

- Raghee, http://www.twitter.com/ragheehorner

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: $EURUSD, forex

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