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. We’re looking at the pound on a 15‑minute chart here. Let me zoom way in. And you can see in the overnight session ‑ I’m sorry, overnight session, geez. In the morning session, you can see coming into the New York open, the pound was accelerating to the upside. So we’ve got 4:15 AM coming into 9:00 AM right here. And then we’ve got just a basic dead market here once the day had gotten going.
And so really, if you’re looking for a move in the New York session, we did manage to catch a 3‑bar versatile hook coming off of this bar here. Shoot, I just detached my toolbar. There you go. It’s a cool function, but if you’re not paying attention…
Let’s zoom back out and let’s go to an hourly here. Here’s the current high on the hourly. You can see from I think it was yesterday, anyway the last one‑on‑one support session, where I was talking about looking for these clumps of ants. We had one running right through the middle ‑ that’s a little bit high. OK, whatever, right about through there.
The market has penetrated that area. In fact, let me draw this on the chart. Or attempt to here. See, that’s still a little bit too high. So we’ll go right about in here. There we go. All right. Oops, and delete.
OK, so let’s zoom in now, and we’re still looking at the 15‑minute chart.
What I’m getting at here is talking about how to approach the market. And with the pound pushing through this resistance, the top of this middle part of the resistance, there was really little reason to jump into the market.
You can kind of see this dashed line here ‑ maybe not. Let me put this red line. This red line, you can see that there are times when the market has hit this area. Now let me get this straight: this is why most people trade support and resistance incorrectly. What they look for is just ‑ well, they’re looking for what they want.
Here’s what I mean. You can see that the market has penetrated this area over and over throughout the last month or so. And so just going back and looking and saying, oh, yeah, the market has honored this line a couple of times, so I’ll use that as my resistance point.
Ah, you know what, that’s just not sound business thinking, not sound trading thinking. So really there is very little reason to get in on a short trade over here. If you did, you made money, congratulations. But just know you’re using a flawed approach. Over time it’s going to come bite you in the backside.
OK, so that’s the 60‑minute based off of what we saw on the 15‑minute. Now as far as patterns go, we do have this handy little pennant forming at the end of today, so we might wind up getting a big move coming into the Asian session. But I wouldn’t hold my breath.
For tomorrow’s session, it’s coming into London, hopefully we can get a quiet market, allowing us to short below 6410. On the long side, I’d really like to see the market penetrate the high here, which is 6469, but that may not happen. So if you’re a more aggressive trader, we do have this double‑top here on these hourly bars. And so buying when the market jumps above 6438 is perfectly all right as far as that go.
But remember ‑ let’s zoom way out ‑ we’re dealing with a lot of resistance coming up into this area here, which is the 65 handle, or 6500 on the British pound right in there. So maybe 100 pips or so for the market to run up.
If we zoom in here ‑ there we go. You can see we’ve got this ‑ where is it? Right there. Let me zoom back out. I just lost my place, blast it. There we go. All right.
I’ve zoomed in on this resistance area. Here’s the 6500 level I was just talking about. Remember, the market is trading right neat this line here. So you can see, we’ve got resistance very, very close, over and over. If I draw this line across, you can see that the market did manage to penetrate, but came right back down.
What that means is if the market does manage to push through this level, 6500, don’t expect it to keep going right away, in particular if it’s a very aggressive move and the bars are looking straight up and down.
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