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Monday, February 18, 2008

GBP/JPY Daily Outlook

Daily Pivots: (S1) 211.54; (P) 212.71; (R1) 213.51; More
GBP/JPY's rise from 205.86 was limited at 213.85, slightly below inner falling channel resistance (now at 213.91). Subsequent retreat dragged 4 hours MACD below signal line, with GBP/JPY touched 211.88 support, indicating that an intraday top is in place. Outlook is turned neutral for the moment. On the downside, break of 209.28 will indicate that rise from 205.86 has completed and suggest that consolidation from 204.49 has finished too. In such case, deeper fall should be see to retest 204.49 low. Meanwhile, on the upside, above 213.85 will indicate that rise from 205.86 has resumed for 100% projection of 204.49 to 214.00 from 205.86 at 215.37.
In the bigger picture, an important medium term top is formed at 251.09 after completion of a medium term head and should top pattern (ls: 241.47, h: 251.09, rs: 241.35), with the medium term trend line support taken out too. In other words, the whole up trend from 148.19 should have ended at 251.09 already. However, subsequent fall from there was contained at 204.49, after being supported by double channel support and formed a short term bottom. Nevertheless, as long as the current rebound is limited below 221.25 support turned resistance, the fall from 241.35 should still be in force and deeper decline is expected to psychological support at 200, which overlaps with next medium term fibo support of 50% retracement of 148.19 (006) to 251.09 (07 high) at 199.64.
However, sustained break of the mentioned inner channel resistance (now at 214.91) and 100% projection level at 215.37 will firstly indicate that fall from 241.35 has completed. Secondly, it will alert that whole decline from 251.09 has possibly completed with three waves down to 204.49 too. Further break of 221.25 support turned resistance will have medium term outlook will turn neutral first in such case and focus will be back on outer channel resistance (now at 231.47).
Posted by Pip-Machine at 11:18 AM

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Very Simple Very Good ;-)

Forex is all about making pips and converting them into Dollars ;-) isent it? yeah it is ... well the more you know the more you get confused... isent it? I DISAGREE :-) Know more but implement only Few .... so when you use simple strategies you wont get confused atleast you wont be thinking about to trust your Moving averages or to trust your MACD or RSI ... apart from all of this ... I designed and implemented very simple strategy and to expose it to all you people mostly my Marketiva Friends and Students !!!

Why you trade 10 or 20 trades a day? to risk more? A survey reports said that " Out of 10 people only 2 people are successful in trading" why dont you be the one in those 2 TRADERS?
So if you want to be in those 2 Traders "TRADE LESS" and enter only when trend is set.... your 2 or maximum of 3 trades can make you earn a SINGLE position but your 10 trades can make you pay 8 trades in losses according to that Survey :-)

Best Regards,
Pip-Machine.

Forex was never easy before ;-)

Forex was never easy before ;-)
..::Pip-Machine's Simple System::..

Pivot Points Table:

Pivot Points Table:
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Elliot Wave Theory::

Elliot Wave Theory::
Back in the old school days during the 1920-30s, there was this mad genius named Ralph Nelson Elliott. Elliott discovered that stock markets, thought to behave in a somewhat chaotic manner, actually, did not.
They traded in repetitive cycles, which he pointed out were the emotions of investors and traders caused by outside influences (ahem, CNBC) or the predominant psychology of the masses at the time.
Elliott explained that the upward and downward swings of the mass psychology always showed up in the same repetitive patterns, which were then divided into patterns he called "waves". He needed to claim this observation and so he came up with a super original name: The Elliott Wave Theory.
The 5 – 3 Wave Patterns
Mr. Elliott showed that a trending market moves in what he calls a 5-3 wave pattern. The first 5-wave pattern is called impulse waves and the last 3-wave pattern is called corrective waves.
Let’s first take a look at the 5-wave impulse pattern. It’s easier if you see it as a picture:
Yes! Thats more like it, Colors always sounds good to eyes instead of black and white Images.
Here is a short description of what happens during each wave. I am going to use stocks for my example since stocks is what Mr. Elliott used but it really doesn’t matter what it is. It can easily be currencies, bonds, gold, oil, or Tickle Me Elmo dolls. The important thing is the Elliott Wave Theory can also be applied to the foreign exchange market.
Wave 1 The stock makes its initial move upwards. This is usually caused by a relatively small number of people that all of the sudden (for a variety of reasons real or imagined) feel that the price of the stock is cheap so it’s a perfect time to buy. This causes the price to rise.
Wave 2 At this point enough people who were in the original wave consider the stock overvalued and take profits. This causes the stock to go down. However, the stock will not make it to its previous lows before the stock is considered a bargain again.
Wave 3 This is usually the longest and strongest wave. The stock has caught the attention of the mass public. More people find out about the stock and want to buy it. This causes the stock’s price to go higher and higher. This wave usually exceeds the high created at the end of wave 1.
Wave 4 People take profits because the stock is considered expensive again. This wave tends to be weak because there are usually more people that are still bullish on the stock and are waiting to “buy on the dips”.
Wave 5 This is the point that most people get on the stock, and is most driven by hysteria. You usually start seeing the CEO of the company on the front page of major magazines as the Person of the Year. People start coming up with ridiculous reasons to buy the stock and try to choke you when you disagree with them. This is when the stock becomes the most overpriced. Contrarians start shorting the stock which starts the ABC pattern.
The ABC Correction
The 5-wave trends are then corrected and reversed by 3-wave countertrends. Letters are used instead of numbers to track the correction. Check out this example of smokin’ hot 3-wave corrective wave pattern!
Just because I’ve been using a bull market as my primary example doesn’t mean the Elliott Wave theory doesn’t work on bear markets. The same 5 – 3 wave pattern can look like this:
Waves within a Wave
The other important thing you have to know about the Elliot Wave Theory is that a wave is made of sub-waves? Huh? Let me show you another picture. Pictures are great aren't they? Yee-haw!
Do you see how Wave 1 is made up of a smaller 5-wave impulse pattern and Wave 2 is made up of smaller 3-wave corrective pattern? Each wave is always comprised of smaller wave patterns.
As you can see, waves aren’t shaped perfectly in real life. You’ll also learn its sometimes difficult to label waves. But the more you stare at charts the better you’ll get.
Okay, that’s all you need to know about the Elliott Wave Theory. Remember the market moves in waves. Now when you hear somebody say “Wave 2 is complete.” You’ll know what the heck he is talking about.
If you wish to become an Elliott Wave Theory guru, you can learn more about it at www.elliottwave.com.