WARNING: This text is a word-for-word transcription of Mac’s daily forex trading video. That means the writing will reflect the way he speaks, if anything seems out of place, please refer to the forex video on the page.
All right, everyone. I am running a little bit behind today, as I said on my Twitter this morning. I did get hit with a pretty severe gout attack over the weekend. It came on really suddenly. It started Friday afternoon, and within a couple of hours was full blown. I haven’t had this happen in two years, it seems like. Anyway, I’ve got tons of remedies. It’s already getting better. Fortunately, I’m not in agony anymore, so I can at least talk without grunting and groaning. But as I said, I am running a bit behind.
Let’s talk about the British pound here. We’re looking at the beginnings of what’s called an M top; that’s a literal letter “M,” like Mike. M tops are common, as are W bottoms.
What we’re looking at here is a possible shift in overall thinking. I guess a better way of saying it would be a collision in thinking between the professionals and the rest of the market. If the market itself, the market participants, are bullish, they’re going to hold on to that bullish mindset for some time.
Take for example back in 2000 when the market was screaming to the upside. Everybody in the world is making money: the shoe shine boy, the newspaper delivery guy. Everybody thinks they’re a genius when it comes to the markets. So we had a pattern similar to this in stocks in 2000, meaning the market pushed up to a high, came down rapidly, pushed up to another high.
This first dip down is when the professional traders pull their buying out of the market. The second move up is when all of the guys who missed out, and all of the aggressive buyers in here, come back to buy on the dip.
If you remember, all through the 1999‑2000, you turn on CNBC, they just kept saying, “All you have to do is buy the dips. Just buy the dips. Buy the dips.”
Well, I’ll save my rudeness. Anyway, that’s not such great advice, quite frankly. You can get into quite a bit of trouble. By the way, this is the daily bar up here.
What we have to be looking for here is some sort of topping pattern. Sorry for stuttering and stammering at you. What we don’t want to do is try and predict the market.
I was just picturing the next questions. “Well, where’s it going to go? Is it going to come down here? Is it going to come down there?” Listen, that type of prediction is for rookie traders.
We don’t know if it’s going to go down here and stop and turn back around, or if it’s going to come down here and just blast through down to new lows. We don’t know, and who cares?
All we have to do is focus on the patterns that we see, and the pattern that I’m seeing here is that the professional traders have first withdrawn their buying. Now we have to see, are they going to come in and sell?
So the key area is going to be these lows down here. I know that’s a ways away from the market, but that’s just the way the cookie crumbles at this point. 5835 is going to be that level.
We’re not really seeing any sort of pattern coming into the hourly other than ‑ this is the 60 minute bar here ‑ other than this trading lane which has formed. It really does look like a sloppy pennant pattern as well.
I say “sloppy” because we have to cut off a bunch of highs in here in order to make it line up, and we also have to cut off some lows to make it line up. So if we were going to draw a pennant pattern, that’s what I mean by it’s a fairly sloppy pattern.
If we do get a break of this double bottom, I’m anticipating a move down, and so I am looking to go short below 6244. I’m looking for the market to come back down into about the 6000 area.
To the topside, we can take trades if the market breaks above these highs in here, which is going to be just above 6400, but we’ve got resistance at 6450, 6500, 6550. So about every 50 PIPs up, we do have some resistance, so keep that in mind. Keep that in mind if you are looking to take some long trades above those levels.
All right, everyone. I am running a little bit behind today, as I said on my Twitter this morning. I did get hit with a pretty severe gout attack over the weekend. It came on really suddenly. It started Friday afternoon, and within a couple of hours was full blown. I haven’t had this happen in two years, it seems like. Anyway, I’ve got tons of remedies. It’s already getting better. Fortunately, I’m not in agony anymore, so I can at least talk without grunting and groaning. But as I said, I am running a bit behind.
Let’s talk about the British pound here. We’re looking at the beginnings of what’s called an M top; that’s a literal letter “M,” like Mike. M tops are common, as are W bottoms.
What we’re looking at here is a possible shift in overall thinking. I guess a better way of saying it would be a collision in thinking between the professionals and the rest of the market. If the market itself, the market participants, are bullish, they’re going to hold on to that bullish mindset for some time.
Take for example back in 2000 when the market was screaming to the upside. Everybody in the world is making money: the shoe shine boy, the newspaper delivery guy. Everybody thinks they’re a genius when it comes to the markets. So we had a pattern similar to this in stocks in 2000, meaning the market pushed up to a high, came down rapidly, pushed up to another high.
This first dip down is when the professional traders pull their buying out of the market. The second move up is when all of the guys who missed out, and all of the aggressive buyers in here, come back to buy on the dip.
If you remember, all through the 1999‑2000, you turn on CNBC, they just kept saying, “All you have to do is buy the dips. Just buy the dips. Buy the dips.”
Well, I’ll save my rudeness. Anyway, that’s not such great advice, quite frankly. You can get into quite a bit of trouble. By the way, this is the daily bar up here.
What we have to be looking for here is some sort of topping pattern. Sorry for stuttering and stammering at you. What we don’t want to do is try and predict the market.
I was just picturing the next questions. “Well, where’s it going to go? Is it going to come down here? Is it going to come down there?” Listen, that type of prediction is for rookie traders.
We don’t know if it’s going to go down here and stop and turn back around, or if it’s going to come down here and just blast through down to new lows. We don’t know, and who cares?
All we have to do is focus on the patterns that we see, and the pattern that I’m seeing here is that the professional traders have first withdrawn their buying. Now we have to see, are they going to come in and sell?
So the key area is going to be these lows down here. I know that’s a ways away from the market, but that’s just the way the cookie crumbles at this point. 5835 is going to be that level.
We’re not really seeing any sort of pattern coming into the hourly other than ‑ this is the 60 minute bar here ‑ other than this trading lane which has formed. It really does look like a sloppy pennant pattern as well.
I say “sloppy” because we have to cut off a bunch of highs in here in order to make it line up, and we also have to cut off some lows to make it line up. So if we were going to draw a pennant pattern, that’s what I mean by it’s a fairly sloppy pattern.
If we do get a break of this double bottom, I’m anticipating a move down, and so I am looking to go short below 6244. I’m looking for the market to come back down into about the 6000 area.
To the topside, we can take trades if the market breaks above these highs in here, which is going to be just above 6400, but we’ve got resistance at 6450, 6500, 6550. So about every 50 PIPs up, we do have some resistance, so keep that in mind. Keep that in mind if you are looking to take some long trades above those levels.
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