Tuesday, December 13, 2011

I am consulting my crystal ball today....

"Don't think you can predict the effect of an unexpected event on the market. Stand aside and wait for clear indications...."

Catherine Davey
Making Money from CFD Trading : How I Turned $13k Into $30k in Three Months

Yesterday, my friend and trading mentor Rob, asked me if I gazed into a crystal ball before I put up my charts. My mind immediately conjured up images of me with a gypsy costume with the flouncy off-shouldered dress. Complete with the hoop earrings and bangles.

The only problem is that I don't have the cleavage for it. No tattoos either. But I do have the long hair and a nice tan....but let's not go there. Got to keep this blog clean. My ten-year old reads it sometimes when he needs a laugh. 

Back to the crystal ball, I said I wished I had one - that way I could win all the time. And then I could kick back and just let the trading pixies do my trading for me.

Inspired by his question, I am going to take a stab at reading my "magic crystal ball" this morning.

Welcome to Momma Meng's Parlor..........


My objective is always 20 to 30 pips per day. I like to start at the 1Hr chart.

It is showing some nice support candles at 3160 from yesterday's close.

The reasons I would be looking for a quick buy is:

  1. 1HR Bossilator is at 497 (so close to 500)
  2. Yesterday's amazing move was 206pips down (average EURUSD move per day is about 150pips). There was no retrace at all - and this is $EURUSD. A very technically oriented currency pair. A retracement is due.
  3. And look at that stochastics - finally it has reached oversold on the 1Hr chart and it's crossed - yaay!
  4. See - those nice purple boxes, if $EURUSD trades above and keeps touching the top of the box and moves back in maybe half way and out again - it could very well bounce up for a retracement to 3250. 
  5. But I would like a retest of the low, just as a confirmation.


If I take a trade, it will be on the 1M chart. But I do like to look at the 5M to check if the coast is clear.

  1. Look at that nice 100 pips from the SMA200 to the SMA800. 
  2. And Bossilator is at 341 - very nice. 
  3. It would be a nice confirmation for EURUSD to break this SMA200 which coincidentally happens to be at 1.3200 (nice round number).
  4. But I would still wait for the Stochastics to go back down to oversold for any buys. Even if EURUSD breaks the SMA200.
  5. I didn't put up the 1M chart but it hit the SMA800 about 11 candles ago. It's kinda doing the DNA dance around it. Which means no trading territory. EURUSD had to move up 40pips from this morning's open to hit the SMA800 - another indication.
So that's my predictions for the day.
Phew, I am looking at this and it sounds like a whole lot of "stuff" just to make that 20 or 30 pips.
I may just be a little insane but at least I have structured my insanity.

I really don't have time to trade today.

Some guys are coming in to do the regular maintenance on the airconditioning units. If you live in 90% humidity like we do here, airconditioning is not a luxury, it's a plain ole necessity.

Yikes...it's nearly 2pm and I haven't even made the kid his lunch!

I'm changing back into my mommy outfit....

Happy Trading!