• In a 0.0050x1 60-minute Point and Figure chart, and thanks to the descending column developed on the 22nd, we can establish an horizontal count targeting a new low of 1.0300.
  • The potential to reach the 1.2100 target was finally eroded and traders are now more confident that serious inroads to the downside can be achieved.
  • The EUR/USD has been showing a volatility of plus 16,000 pips since August, as measured in thresholds of 50 pips, an equivalent to a 150% performance path at current rates. Point and Figure charts show this practical measure of volatility very well. The risk in turn, is measured in terms of the height of the range, around 1250 pips.

EURUSD Point and Figure

  • Directionally, I remain a EUR/USD bear over the short-term, having closed a big portion of floating longs last week, and positioning new sell limits at 1.1100, 1.1114 and 1.1130. How the equity curve stays can be seen in the below chart.
  • Adopting fresh longs will be done around the 1.08 area, specifically at 1.0801 and 1.0797.
Equity Curve

The trading methodology reported in this analysis is based on a non-directional approach. It is meant to capture the most amount of pips from the constant price oscillations, either up or down. Each trade has a take profit of 50 pips, a stop loss of 500 pips. The size of each trade is regular, but trades can be stacked around key support and resistance zones, increasing the overall position size around certain price zones. The system can perform either in trending or range bound markets, but it suffers when there is an extreme unidirectional price advance. Buy and sell positions are taken with two separate real accounts.
To learn more about the method, you can watch these special webinar series:

Exploring the Coast Line of Foreign Exchange Land - Part I
Exploring the Coast Line of Foreign Exchange Land - Part II


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