Category Archives: daily charts

AUDNOK Daily – Not Mainstream

The Cross Pair Analysis service covers a large number of non-US Dollar vehicles on an ongoing basis. One of the more unusual ones in our sights is the AUDNOK – which over the years has shown a tendency to trend well for long periods. Chart 1 shows the recent Daily moves in the pair without any annotation – it looks as though price is moving in a fairly horizontal range but I think most would accept that this would be somewhat difficult to trade.

Chart 1

audnok-daily-chart1

By establishing a path of price and monitoring the strengthening and weakening of trend, Median Line Analysis allows traders to analyse and profit from a vehicle using high probability and low risk entries.

Chart 2 shows the same AUDNOK Daily but with a pitchfork added. I have used the significant late July low as my A pivot and the next significant high and low as my B and C. All of a sudden the chart “comes to life” and numerous supports and resistances become apparent. Our brains are constantly looking for patterns in what we see around us and drawing a pitchfork gives context and makes sense of the movements of price.

Chart 2

audnok-daily-chart2

In order to determine that we have indeed found the correct path of price we need to see activity along the angle of the pitchfork that we have drawn. This does not have to be along the main lines of the fork itself but it does have to be in the angle of ascent (or descent in the case of a downfork). Here there are a series of resistances along the arrowed Sliding Parallel just under the Median Line of the fork. These would alert us to the probability that we were correctly defining the path of price – we would watch the continuing action along the lines of the fork, building a picture of likely areas of support and resistance. Further confirmation would come from the last two red arrows in the line of the Quartile and this is so even though price had dipped beneath the Lower Parallel of the fork in the area of the puce circle. Remember it is the angle defined by the fork not the fork itself which is important to the methodology.

The dip to the puce circle in early March led us to draw a Sliding Parallel – again shown here in puce – from that point as a potential line of support. When price revisited that line a couple of months later we were watching it as a potential area of support. as is apparent form the puce arrows the anticipated support held and also gave traders the opportunity to take a long position with the benefit of a tight stop – for example by going long from 5.4877 at the second arrow with a stop beneath 5.4841at the first arrow.

As price moved away from this line of support a trader would probably move his or her stop to breakeven in order to use “the market’s money” in the trade. The two green circles show a bullish context as potential resistance along the underside of the Lower Parallel turns into support. As on the horizontal, when resistance becomes support we look for price to move higher. This is precisely what has happened with it now reaching an area of anticipated resistance in the larger green circle at 5.7890. Not only is this horizontal resistance as shown by the green line but also resistance in the line of the fork along the Quartile. The last two red arrows show that this was the previous line of resistance in the fork and, if the strength of trend was the same, we would anticipate that this would again be the line of resistance to watch.

Having moved from anticipated support to anticipated resistance I hope that I have shown how the methodology can be of use in analysing and profiting from the moves in a chart. I will continue to monitor the way trend is strengthening and weakening in the angle of the pitchfork that I have drawn.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

The Bigger Picture – GBPNZD Daily

Following my reference in the last article to the Daily chart of the GBPNZD giving us context I have been asked if I would expand on this a bit. What we are looking to do with Median Line Analysis is to find and define the path of price by using pitchforks. Having established the valid angle of ascent or descent we then look to track the strengthening or weakening of trend along this path. Using pitchforks we are able to predict with great accuracy likely areas of support and resistance and to use these to our benefit in our trading.

Chart 1:

z1-gn

Chart 1 shows how the price of GBPNZD has moved on a Daily timeframe over the last few years. We are pattern-seeking mammals and we need to organize the action that we see in order to make sense of it and to give it context or perspective. By looking for the path of price and defining it by means of a pitchfork we are able to do this.

Chart 2:

z2-gn2

Chart 2 shows such a pitchfork that uses the very obvious A, B and C pivots to do so. What we are looking for to validate the pitchfork – to prove that it is defining the angle of ascent of price – is to see action along the lines of the pitchfork. By this I don’t mean that this has to be along the Median Line or Upper or Lower Parallels but I am looking for something that is in the line of the pitchfork. In this case the Sliding Parallel action just above the Median Line is evidence that this pitchfork is doing its job.

In order to explain what I meant in the previous article I have highlighted a couple of Sliding Parallels in Chart 3. We already have evidence that the lines of the fork are working – that they are providing support and resistance along their angle – so we look to trade off these lines.

Chart 3:

z3-gn3

The last touch on the lower puce Sliding Parallel in the first green circle is at 1.9218 and the previous low is at 1.9196 so a long trade could be taken off the Daily chart with a 22-30 point stop (depending on your broker). The target for the trade would be the higher puce Sliding Parallel where a line of prior support was potentially a line of resistance. Price did move precisely to this line finding resistance in the first red circle at 1.9722 – a move of 500 points from entry.

From there it fell once again and we anticipated and saw support along the lower Sliding Parallel once more. On this occasion price touched it again in the second green circle at 1.9277 and once more pushed higher to anticipated resistance along the same Sliding Parallel at 1.9764 – again a move of nearly 500 points.

This was the context and the expected support and resistance that I was referring to in the previous article. Hopefully it is apparent that putting together the context here and the detail previously discussed would enable traders to take advantage of the strong moves that we have seen. From the Daily chart that I have shown here it would have been possible to bank approximately 1000 points in this vehicle whilst using the smaller 240 and 60 minute charts to clarify detail and to minimise risk. Median Line Analysis allows us to predict these areas of support and resistance with great accuracy.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Across Timeframes – AUDCHF

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 min ones. I wanted to look at this pair in further detail and expand on what I had previously written to include an explanation of how we look across timeframes in order to map and define how vehicles are moving.

Chart 1:

audchf240-chart1

We had been following the AUDCHF 240 minute chart shown in Chart 1 for some months by means of an Andrews’ fork originating in mid-December 2013. We use pitchforks to define and delineate the all-important path of price and seek to follow the strengthening and weakening of trend as the vehicle moves along. Using distinct A, B and C pivots we were alerted to the fact that this pitchfork was likely defining the path of price by the green circled action underneath the Lower Parallel in mid-March. To some people the fact that price was outside the Lower Parallel would disqualify the fork and start them looking for something else. Remember our focus is on the path of price – in other words it is the angle along which price runs that is important. In this case it happened to be beneath the Lower Parallel, but what sticks out is the fact that it was along the dotted Sliding Parallel.

We continued to follow price noting how it “stepped up” to find arrowed support along the Lower Parallel and then moved higher to find resistance along the Median Line. Note how the purple highlighted Sliding Parallel acted as support before price stepped down once again to once more find arrowed support along the Lower Parallel. We are watching previously proven lines of support and resistance given to us by our early definition of the path of price.

From the Lower Parallel price started stepping up once more – the series of arrows show this move. Note the penultimate arrow shows support along a Sliding Parallel that had previously acted both as support and then resistance. This is also the case with the final red arrow showing how once again the purple Sliding Parallel acted as resistance and then once more as support. As on the horizontal when a line of resistance becomes support that is viewed as bullish.

Chart 2:

audchf60-chart2

Chart 2 shows the same vehicle on a 60 minute timeframe and is something I have written about in a previous article. This smaller chart allows us to use the same methodology and techniques to look at the moves we have seen in Chart 1 but in finer detail. Without going into too much detail – this is found in the previous article – the third green circle shows a conjunction of support and a low-risk, high probability place to take a long trade. The resistance along the red Sliding Parallel became support in the same place as we witnessed an arrowed touch on the tested and proven blue Lower Parallel. Not surprisingly price took off from here and we have been tracking it closely ever since. We are watching it move in the channel defined by the two purple Sliding Parallels though are aware of a potential stepping up of support as shown by the red arrows. A stepping up of support will often lead to a stepping up of resistance too and we are currently watching to see whether we now push above the Sliding Parallel resistance and set a new, higher channel in the line of the fork. The move from the blue Lower Parallel at 0.8155 is now worth some 210 points for a risk of a 10 point stop beneath prior support.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup