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June 14, 2009

6/14 EUR/USD Head and Shoulders Update...

Hello Traders-

Well, well, well....this puppy is coming along nicely. The updated chart says it all, we have come a little more than 100 pips since the last post. Very nice progress. The 'right shoulder' is forming quickly, but had a very nice basis on which to do so mostly because of the choppy action within the 'right shoulder' from last Thursday and Friday. We like to see that, as we do not want thinly formed shoulders, only to end up having a potential fantastic setup evaporate, or worse yet, end up causing an unnecessary loss due to trying to front-running the confirmation of the overall pattern. This by the way is a NO-NO. I will say this again because I find it to be very important; DO NOT FRONT RUN HEAD AND SHOULDERS CONFIRMATION. At somepoint, your head will be handed to you and nobody wants to have that happen. Interestingly enough, the head of this pattern had a very nice mini-H+S pattern, as well as the right shoulder. Both played out nicely, and since H+S patterns are considered reversal patterns, we definitely like to see the psychology and emotion clearly being played out in same micro-structure that applies to and adheres to the OVERALL structure of the larger pattern at hand. I hope that makes sense, its a big convoluted. Please contact me if not, and I can explain further. The important aspects right now are watching the GBP/JPY, EUR/JPY, and of course the EUR/USD for signs that stops are being run, longs are exiting the market, new shorts are adding, and even newer shorts are coming to play as well. This will all end up with hopefully a clear confirmation of a neckline break, and then we need a test of that area to continue the larger move the is predicted by the overall pattern. I am looking at something like +375-400 pips from the neckline as a target. Cant be exact, but somewhere in that range would not surprise me. I also must mention that patience is of the essence because even if this pattern confirms, it can take some time to reach the overall target. Remember, most losing traders deal with their position for approximately 72 hours if they are not pure day traders, and with time contraction and time cycles, it can take a bit for the market to form properly. But as Jesse Livermoore used to say (not an exact quote), "I made my money from patience, not from trading"-

Good Luck and feel free to write me with questions!


suchen said...

Hey HT,

I just found your site...good info you are providing here!

Had a quick question, I just started trading the 6E Futures Contract and wanted to ask you what is the best time to trade it?


***Hawaiitrader*** said...


Thanks for visiting, glad you enjoyed the post.

You know, with regard to the /6E (Euro FX Futures), I normally trade this contract ONLY during the London Session. For some reason it acts in such a manner during this session that it is aligned well with my strategy and trading pschology. Once the US Market opens, I do not trade the /6E. I do trade the spot Forex market during the US Session, but that is it. Overall, since I am in Hawaii (-6hrs from EST), I find the best trading to be during the Asian and London Sessions for spot, but only the London for FX futures such as /6E , /6J, /6B....