EURUSD Daily River Theory Analysis

[DownRiverTrader]

Just like me this weekend, the market appears to have decided to "unwind" a little to say the least. The carry trade risk seems to be dominating early on. So what is our plan?


If you have been following this pair with us, you will recall that we were focusing on the 3193 River level from late last week to be our key to the next short term directional move. I have included a section of the previous post below. Here is what we were planning as of last Friday's analysis


" The key 3242 level was tested today and held. Price moved down and appears to be testing the 3193 River level today. This new River Level remains our key to the next directional move.If we continue to move down, then I would look to add to existing longs or establish new longs at the Transition Level of 3132. Targets would be 3193, 3242 and finally 3353 where traders should exit longs. Risk for this trade can be a daily close below the Transition Level of 3132."

Last week's final post also warned...


"Stay nimble if we have a strong move down through the Trasiition area as prices will likely be very volatile here. A settle below the 3065 area indicates further downside"

How have I been approaching today's emotional market?


I have been adding heavily to my existing longs on the surge through Trasition. I continue to target 3242 and then 3353. And only a significant daily close below the Transition Level at 3132 will alter my view. We will devote some time to this view in our discussion area today and if you haven't already, read the information on "Transition Levels" in the Methodology Section.


So what to do?


Focus on the 3132 Transistion area for the next session or two. A move back up to test this area will be the short term key.


Aggressive short term traders can set up shorts on a failure into the Transition Level of 3132. Downside targets would be 3069, then 3007 where I would cover and take profit. Only novice traders will chase today's move down.
A move back through the Trasition Level at 3132 would be short term bullish and I would set up longs with targets of 3242 and then 3353.
With the strong move down today, the new River Level is coming in around 3140 as of this posting. We will need to clear this level on the upside for longs to advance.


Only a close below the Trasiition Level at 3132 would cancel my short term bullish bias.


BULLISH ABOVE TRANSITION LEVEL AT 3132

 

[FXSCALPER2]

I wish I owned this place. I would just delete and ban rubbisg like this for good. Give us a break and go away. River??????? What are you on?

 

[DownRiverTrader]

I see you are a 3 star member. You should not be so quick to judge without all the facts. It can lead to bad decision making. I see from your other posts that you enjoy using words like rubbish when you do not agree. This sends a strong message when in print.

What do you call your tools? Lines, MA's, Stochastics, Pythagorean Theorums, Quantum Physics?

BTW, look at the low of the EURUSD and compare it to the advice given on the bottom of the orange arrow (or did you bother?)

 

[DownRiverTrader]

Eurusd 3-6

The 3132 Transition Level demand did not win the battle today and price closed at 3088. My short term bias on this pair is now neutral. I indicated that short term traders should cover on a settle below the Transition Level and this view still holds. Short Term Longs should cover and stand aside.


I indicated that I added to my long positions today below the transition level. I remain long but I do not recommend risk adverse traders do this. Please refer to the updated March PDA analysis post and you will see why I have added at this level. I am watching the 3063 level closely.


So what now?


You should note that River and Transition are at the same level of 3132. This area will provide ample supply on a move up. Aggressive traders can set up shorts at this level looking for 3069, then 3007. Risk would be an intraday move through the River Level at 3132.


If price continues to move down, the 3169 area can be used as a trigger to set up shorts for a continued move to 3007 where I would cover. Be very careful on the entry as demand is present here and a reversal to River is possible.


As recommended yesterday, continue to focus on the 3132 area to indicate the next directional flow. A move above here is very bullish.


NEUTRAL UNTIL 3063 (MONTHLY PDA) IS RESOLVED

 

[DownRiverTrader]

Monthly Price Distribution Analysis

March 2007

Here is a copy of the Monthly PDA that I made reference to in the preceeding post.

Our monthly bias for February was accurate. Price did trade up from the 3063 River Level to last month's Flood Flow Level in the 3262 area. You will see that the March River level has now moved to 3132 area and we are currently trading below this level. During the first wek of March we see that the bottom of the upper tier distribution curve is being tested once again. The resolution of this level is critical to our next short term directional flow. I remain bullish until we trade below the 3063 Transition level for a few sessions.


I continue to look for a move above River, to 3262 and finally 3493.


Only a move below Transition at 3063 will change my short term bullish bias. If this move does occur, I will update the PDA shortly after.


BULLISH WHILE TRADING ABOVE TRANSITION AT 3063

 

[DownRiverTrader]

A MasterTrader realizes that his/her trading system is only about 5% of the total methodology required to achieve Master status. Don't worry about the system, focus on the the most difficult aspect of trading....."The Self"

 

[DownRiverTrader]

If you want to be a successful trader and acquire wealth then you have to do one thing. REMOVE ALL INDICATORS FROM YOUR WORKSPACES. Get rid of your stochastics, get rid of your MA's, get rid of your CCI's and your Bollinger Bands. You do not need these. They are merely a reflection of price. Your subconscious mind does not need this type of archaic help to figure out what is going on. There is no computer in this world that can even come close to the power of your mind.

If your software program has the ability to plot in line form then give this a try. Use the same time frame that you use for your indicator. Now compare the pricing with your indicator lines. Do you notice anything? Maybe not.

Please stop and think about what the indicators are really telling you. Do you know what it is that they are saying? They are saying "I am a lazy, stupid trader that is not capable of making a judgement on my own". I know this is not really the case with you but an indicator is nothing more that something for someone who has no idea what else to do! This person has hopes and dreams of creating wealth for himself and his family and he thinks this squiggly line is going to be the ticket. Let's give ourselves more credit, we are intelligent human beings.

I guess there is a strong argument that they are self-fulfilling since millions of people watch them every day and make decisions based on the same patterns and information. Incredible when you think about it. Just an easy way to give someone a quick plan of some description for trading. I bet brokers and dealers love them. They make it easy for anyone with an extra $1000 to get started. By the time you react to the indicator, it is already priced in the market. There is no edge here.

Whenever you buy and sell something there is only one thing that is important if you want to make a profit. If you buy something, you are making a bet that someone will pay you more for it in the future. And vice versa. In order to make good decisions on buying and selling, you must understand value. Focus your efforts on determining what represents a good value in the market, not watching for the slow stochastics to cross in oversold territory. Always ask yourself, am I buying at a known level that is good value compared to some other level. It is not as hard as you think.

It boils down to simple supply and demand. Get all those danged squiggly lines off your charts and just begin to look at pure price action. Find those value areas for support and resistance. Buy and Sell like a mastertrader.

 

[DownRiverTrader]

The Holy Grail

The Holy Grail of Trading is Learning to Manage and Understand Risk. Not entries, exits or profits. Develop a thorough understanding of risk. Design your entire Methodology around it. You need to be completely comfortable with risk or trading will be very difficult. Learn to embrace risk and you will succeed.

 

[DownRiverTrader]

As anticipated, price traded up to test the River Level at the 3132 (High was 3130). The supply here capped the topside today. Note that the River level is now at 3145 based on yesterday's volatility.
I remain overall bullish on this pair and continue to hold my longs into the current Transition Level. I am continuing to watch the 3063 level as indicated on the PDA for March on this pair. If we settle below this level I will exit my longs. Please take a look before making a plan to trade.


So what now?

Expect extreme volatility at the Transition Level as bulls and bears battle it out. Plan your risk with care and do not hesitate here. Your goal is to capture the directional flow away from this level as it will be the catalyst to our next strong move. The ECB rate announcement is on Thursday and this may add to indecision.


Aggressive short term traders can set up shorts on a move into the transition area at 3132. Risk should be above River at 3145 on an intraday basis. Targets for successful shorts are 3069, 3052, then 3007.


Longs can be established on a move through the Transition and River Level at 3145 with risk on a significant daily close back below 3132. Upside targets are 3220, 3242 and 3353.


As recommended yesterday, continue to focus on the 3132/45 area to indicate the next directional flow. A move above here is very bullish.


SHORT TERM NEUTRAL UNTIL THE 3145 RIVER LEVEL IS RESOLVED

 

[pssonice]

B 0749:eurusd[13127.4/13129.4/8.8]

So what now?
Aggressive short term traders can set up shorts on a move into the transition area at 3132.

Longs can be established on a move through the Transition and River Level at 3145 with risk on a significant daily close back below 3132. Upside targets are 3220, 3242 and 3353.
0749:Silver[1286.5/1291.5/-5.3]
0748:AUDUSD[7767.5/7769.5/23]
0749:GBPUSD[19320.3/19323.3/30.8]
0749:EURUSD[13127.4/13129.4/8.8]
0749:C-FTSE[6128.3/6134.3/12.3]
0749:C-SPXu[35.1/40.4/-4.2]
0748:C-DOW[12188/12194/-18]
0749:BrentUKMay[6213.5/6218.5/1.5]
0749:USDJPY[11637/11640/-29]
0749:EURGBP[6793.7/6795.7/-5.5]
0749:FTSEu[45.2/50.1/-3.2]
0749:FTSE6125C[71.4/76.4/73.9]
0748:Gold[643.8/644.3/-2.4]
0749:C-DAX[6611.5/6613.5/17.5]
0748:C-CAC[5453/5455/-9.5]

 

[DownRiverTrader]

What does this mean? Is it German?

 

[DownRiverTrader]

Today the EURUSD pushed through strong supply in the Transition Level at 3132 and also pushed through yesterday's River Level at 3145. We are still working to resolve the River Level and I anticipate building value into today's ECB rate announcement and the now famous Ms. Trichet press conferences. Expect volatility during his press conference and plan accordingly.


I remain overall bullish on this pair and continue to hold my longs into the current Transition Level. I am continuing to watch the 3063 level as indicated on the PDA for March on this pair. If we settle below this level I will exit my longs. If we settle significantly below transition, I will likely lighten my long positions also. Please take a look before making a plan to trade.


So what now?

As I indicated yesterday, your goal is to capture the directional flow away from this transitional level as it will be the catalyst to our next strong move.
Yesterday I recommended to establish longs on a move through the Transition and River Level at 3145 with risk on a significant daily close back below 3132. Upside targets are 3220, 3242 and 3353. If you established longs on today's move then stay long. Short Term Traders can establish new longs ahead of 3132. Risk should be with a daily close below this level and targets are the same as established longs.


Continuing to trade above the Transitional and River Levels is very bullish.


SHORT TERM NEUTRAL UNTIL THE 3162 RIVER LEVEL IS RESOLVED

 

[DownRiverTrader]

Well, Ms. Trichet did not use the "V" word today so everyone is now unsure what to do. Maybe it will take NFP to get us moving today. Stay nimble and trade with a plan.


I remain overall bullish on this pair and continue to hold my longs into the current Transition Level. I am continuing to watch the 3063 level as indicated on the PDA for March on this pair. If we settle below this level I will exit my longs. If we settle significantly below transition, I will likely lighten my long positions also. Please take a look before making a plan to trade.
So what now?


As we have been discussing, our goal is to capture the directional flow away from this transitional level as it will be the catalyst to our next strong move.
Yesterday, I recommended to establish new longs ahead of 3132. The market gave us the opportunity to buy today and we are currently holding at this demand level now. I continue to look for 3242, then 3353. Risk level for longs should be aggressive under 3132 or under 3063 as indicated in our Monthly PDA.


If we do move down from Transition at 3132, then look for 3069, 3007. River comes in 3148 today so risk for a short position could be above this level. Settling below the 3063 level means we could see further downside ahead.


SHORT TERM NEUTRAL UNTIL THE 3148 RIVER LEVEL IS RESOLVED