DaxTrader Lion

Dax Technical Analysis 11/07/2017

No Video Today – back tomorrow

I have been hosting webinars all morning, so please excuse the delay in getting this article out. As an update, the new Journal dashboard is nearly ready. I hope to have it completed by tomorrow or Thursday. Another update, we closed the Dax trade from yesterday a little earlier this morning, but this one would have comfortably hit target and gained 80 points. Congratulations to those who profited.

So today, I have a couple of scenarios to consider. The bearish options are to go short from a retest of the highs from earlier this morning or to go short on a test of a break below the rising trend support. The bullish options are to go long from a test of the support around the low 123xx zone, or on a break above the highs from today.

We have taken out the POC from yesterday and already extended 100% from the gap open this morning. So as for opportunities right now, we need to wait for the price to come to us. We are currently forging a double distribution day and the price has already rejected a move through that area just a few moments ago.

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Yesterday’s Journal

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17:55

I think I am done for the day. It’s been quiet, the other half of the trade is still running, so let’s look for more opportunities tomorrow.

16:42

Part of my thinking now is, are we about to have another burst higher from here. Delta is still gaining bullish momentum, suggesting that Bulls are taking firm control, but we’ve pulled back to lower prices. With this divergence, can we get a re-entry? Maybe

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16:22

This one is going nicely, so I am leaving it to move around. I think there is space for this to move into, but don’t be too attracted to it, don’t jump in too late. Because it could trap longs near to 12500.

Gold is looking interesting

US Oil trade is going really well

EURUSD trade is meandering without any real progress, so I may close it soon

15:13

Half of the position is closed and the rest has been moved to just above B/E

15:02

I think it is worth repeating my signal process. that the signals I am sending out are based on FXCM price data.

I analyse the futures price and use a futures account for my personal benefit, but the majority of my signals trading comes from an FXCM account, using MT4. This is because I have built a script solution that sends my trading data to Telegram messenger. However, FXCM is not trading the underlying futures price, it trades a price that is ‘similar’. So, for this reason, there can be a slight difference in price. It’s around 8-10 points. This can make a big difference to a trade working out, or getting stopped. So please adjust your entries based on the differences.

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14:40 – ORDER FILLED

I was filled earlier, price did just about hold on and we are currently treading water, just above the entry

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14:06 – Nearly there

We have a triple bottom on the 5m chart, so when it breaks, it may be a quick reaction, which puts our position at risk.

13:20

It’s been pretty quiet for a Monday so ar, perhaps the summer is having a bit of an effect. It normally does. But this is what I am looking at. It’s a rising delta suggesting bulls are currently gaining momentum. We tested the ows, but did not yet get filled.

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12:56

Price is approaching the order, so it may well be filled. It is at this stage, that it becomes difficult to remain patient. Two thoughts often go into your mind. 1) Will price just tank through my order and stop me out quickly. 2) Will it reach my limit or reverse before it gets there. I wonder who else has those thoughts. In those moments, it pays to remain loyal to the analysis. It’s in the plan, the risks are noted.

Let’s see if we get a fill.

12:01

A little bit of movement (bearish) offering the possibility of a retest of that gap. If that happens, then we may get filled.

11:22

With delta picking up, it seems we may have missed this entry. Can we get in from current levels? Yes. But the reward to risk put it’s into the ‘poor’ category. However there are plenty of points for grabs on the way to 495

10:49 – TRADE

I walked away from the computer for 5 minutes and came back to the reaction I was waiting for. In hindsight, could I have placed a limit order earlier? Yes. But never mind. So I have placed a limit order now. It’s 4:1 and the levels could be good. But it relies heavily on this ‘gap close low’ being tested, pierced and then rejected.

The 495 is just short of the 100% extension that was discussed in the webinar.

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10:15

Price continues to climb higher, the longer that continues, the stronger the bullish trend line will become, which would offer a potential signal when it breaks. If price does not break the gap, before heading to 12500, perhaps it will go on the way back down (should 12500 be respected).

09:29 – STRATEGY

So I am thinking a three step strategy, based on a couple of technical confluences.

  1. We close the remaining gap from this morning. We had an attempt earlier, but fell short at around 50% of the gap. I am keen to watch for a second attempt closing that. Finding a good reward to risk is the challenge (especially if I want to ride that move lower with a short)
  2. We find support at the bottom of the gap, also using the center lines pulled from the POI through the 50% line and this can provide an opportunity to go long up to 12500
  3. 12500 is a 100% extension target, assuming that this gap from earlier represents a balance point from the moves oon Friday.

So in summary, I would like to see a move to 12410, then up to 12500, then from there I think we find sellers.

 

07:00

There you go. The POC hit from Thursday on a gap open. That’s interesting. A gap! So have we got a potential balance point developing now. Therefore we can start to predict targets.

6:27

On Friday the Dax closed way above the deviation high and the value area high and approached the POC from Thursday. We were looking at the possibility of a rally if we broke above the triangle support, marking out two possible zones, one around 12410 (a high volume node from Thursday) and the second around 12440 (another high volume node, just above the Thursday POC).

The opening call/prediction for the DAX is a move higher towards that second target. This is great because the analysis was good, but this is bad because no trades were placed on Friday afternoon, so the move was not taken.