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. Well, we had a sudden boost of energy out of the British Pound today. Let’s go over here. You can see this was the area we were talking about yesterday where we have the consolidation, the Pound kind of futzing around.
Now if you remember, I was looking to go long above the high here, short below the low here. So we did get a good breakout above the high, but coming over here to the 15‑minute, you can see, you really would have had to have been an agile trader in order to catch it on the breakout. Having said that, though, we did have a very nice little dipper right here where you’ve got the market breaking above the prior high ‑ this was actually a double top ‑ and then giving a secondary chance to get back in.
Remember, when the professional money is looking at getting into a position for a several hundred point move, because of the size of their positions they can’t just get into them without checking the market first. This is why the little dipper is such a powerful technique, because once the market does make its break ‑ above this high, for example ‑ the professional traders will oftentimes check prices out, is the way they say it. They’re going back for a second look, in other words.
And you can see up here, you know, here was the double top. You’ve got the high from the 26th, high from the morning of the 28th. There’s the break ‑ which you can see, the little dipper came very quickly. There’s the first push up, boom. So the way that panned out was very, very quick, but it was certainly there if you were looking for the break above that prior high, which was back over here on the four‑hour.
Coming into tomorrow’s session, remember, tomorrow is Friday, so we’ve got to be content with possibly a fairly sedate day, meaning not a whole lot going on. At this point, though, we have a very nice flag pattern giving us our compression after the breakout, so we’ve got to watch out for the possible big move. I’m more inclined to the short side, again, because of what’s been going on. The market pushes back into resistance; that resistance, to me, looks like another point to go short.
Remember: What I want to see is for the market to break back above these highs first and then come back down for the little dipper before I start thinking about going long from a position trade. But in terms of getting into the British Pound, where I’m trading to the upside, 6574 for the buy. Getting in on the short side, though, I think is a bit easier because we have this vacuum area here in between the low and this past high, which means getting in below or right at 6525. I’m sorry, a break below 6525.
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