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Posts by "cygnus"
80 Posts Total by "cygnus":
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Posts by Anonymous "cygnus":
Its an Obama-Nation...
There are many ways people identify potential support and resistance levels. The most obvious is looking back at levels where there was previous support and resistance you mentioned.
Then there is trend line support and resistance. Some also look at channels where there is an upper and lower trend line.
Some people also use pivot points that are based on a calculation using the open, high, low and close price over a prior time period.
Then there is fibonacci ratio levels.
I recall subway once mentioning that he uses a Gann fan type analysis to identify support and resistance.
You also have wave analysis as in Elliot Wave theory. This involves pattern recognition and fractals.
Over 80% of forex trading is speculative in nature.
Not everyone is like who can have a misunderstanding of the basic dynamics of the forex market, be consistently consistently incorrect on your calls with respect to a currency pair, and not lose money because you are always perfectly hedged without any cost...or...
You use historical data. You apply your system to the past and see what the results would have been.
Once you really engage in attempts to develop - and back test - a system, you will see that one needs to identify/consider the matters such as the extent of the edge in trade execution, the maximization of winning positions and minimization of bad ones, extent of capital draw down tolerance, etc. You should also have an idea of what return you can expect from the system and over what time frame. A system where you can confidently expect a 7% return on capital per year over 5 or 10 years would be an outstanding one and you would be league with the some of best traders/hedge funds in the world.
My view remains largely unchanged from about three months ago. At that time I opined that we were at a cross roads where either the euro would push down or we would see a more complex retracement. I believe what we have seen since is the latter, i.e. continuation of the retracement. My best guess now is some further upside for the pair. I wouldn't be surprised to see 1.41 by Tuesday or Wednesday. I am ultimately looking for an opportunity to open a short position, however.