E71! trade ideas
Euro LONG - Supply & Demand + Correlation PlayOverview: There is an ADP Non-Farm Employment Change report tomorrow at 5:15am PST which is expected to have a high impact on the US Dollar. We all know how unemployment has been recently - the worst the world has seen since the Great Depression. We are also entering the extremes of the range on the Euro and US Dollar, providing a high probability opportunity for a reversal. EU Economic Forecasts will be released at some point tomorrow as well which could accelerate price into our zones.
Analysis: To determine the area of entry I've used a combination of supply and demand analysis, multiple time frames, and candlestick analysis. Candlestick structure was found on the higher time frames, and risk was minimized by finding structure in the lower time frames.
Set Up: This trade will have a risk of $125/contract and potential profit of $468.75/contract. If demand forms as price moves away from our zone, a manual trail stop will be moved below demand zone with a buffer to lock in profits. Target may be moved to let the trade run depending on market conditions tomorrow and if significant demand forms as price leaves zone.
Target: 1.08440
Entry: 1.08065
Stop: 1.07945
If price falls below this zone, there will be a second opportunity for a long entry at 1.07580-1.07390 . This should provide an ever greater probability and higher profit potential.
Forex EURUSD vs Futures 6E ShortWithout getting too technical on lot sizes for forex and contract sizes for futures contracts. The fact remains that the Forex EURUSD pair and be traded with the futures 6E contract.
I personally trade futures rather than forex as I can trade either the Futures Emini contract 6E. Or, if the risk is too large between entry and stop using our Roller Coaster Indicator suite, I can switch to the micro contracts which are only 1/10th the value of the normal 6E. This versatility allows me to get in more currency trades, than if I were just trading the Forex EURUSD pair.
This chart is an example of our Roller Coaster Indicator Suite for the trading view platform with the 6E contract on the right chart and EURUSD on the left chart. Both 15 minute charts! As you can see the behaviour is very similar.
Concentrating on the right hand chart, the 6E contract, the Stop is approx 1.08500 and Short Entry 1.08200.
So for the main 6E futures contracts that is 60 ticks Risk and at $6.25 per tick, that's a Risk of $375 for 1 contract
Now for the Micro contract, that's only 30 ticks Risk and at $1.3 per tick, that's a Risk of $39 for 1 contract. ( Micro 6E contracts do not have the half point values like the main 6E contract).
So if $375 is too much Risk, then maybe 3 micro contracts, giving a Risk of $117 would be more suitable for traders.
This is just an example of how versatile futures trading can be for currencies, instead of just trading Forex. Our Roller Coaster Indicator Suite is very powerful, but sometimes the risk seems a little high when traditional Forex trading and this alternative, using futures emin and micro contracts, should be worth exploring for serious traders.
This particular trade was a 1:2 winner and I traded 5 Micro Contracts, Risk $195 for a profit of $390, Which isn't bad for 3 hours in the trade. Yes I could have won twice that with 1 normal emini 6E contract, but the Risk was too high for me as I had 2 other trades on at the same time with Gold and one of the indexes.
I wrote an article on our blog, back in February, discussing the Roller Coaster strategy , Getting in the Groove and Risk management, you may find interesting.
EURUSD, Weekly - short squeezeRecently the large speculators has significantly reduced the short positions in the euro futures market. This seems to be a huge change in the positioning of the important market participants. This may suggest that the recent downward trend in the euro fx may be ended.
This type of switch in positioning is a rare phenomenon so it could worth paying attention to it.
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Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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Time To Bail? Distribution Megaphone At Top Of ChannelEuro is at top of a number of downward channel trend lines and is printing a megaphone pattern. This looks like distribution as the larger traders dump positions into the order book and widen its range.
Selling from the top of the day here could be a very good swing position short. I also have a short bias intraday.
