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, everybody. Well, the British Pound has been in a sideways action for several days now. And if you will recall, we have been talking about a couple of areas of resistance. If you’re new to the crew, one of these areas runs right about through here. And it’s a very wide zone, I realize that. It’s bordered by another one down here. And so what happens when we see the market going into a long‑term consolidation, what happens are we get these overlapping areas, and it’s like we’re going from one choppy set of trading to another. And that’s OK, because we need to learn to anticipate that and we need to learn to expect that in our trading. And so let’s zoom in here just to the last couple of days. We’ve got this support zone which is building down here. We’ve got the resistance zone up here. And you can see the market has been ping‑ponging back and forth between those two.
Tomorrow is probably going to be no different, Thursday. And so we need to watch for price coming down to about 6106 and running into support, and we need to watch for price coming up to 6252 and running into resistance. What’s important also is that as we’re watching price, we realize that we need to break out of this whole sideways zone before we’re going to see price go anywhere. In other words, as traders are coming in the market, the sellers are coming in up here, the buyers are coming in down here, and until one of these groups gets overwhelmed, the market will absolutely go nowhere.
What that means is countertrend trading. You can check your checklists, you can go through the Quick Start discs and get a good handle on how to trade in a countertrend trading environment. As far as any sort of prolonged move, any sort of trend move, I’m looking for a little dipper. I want to see the market break to the downside and then come back up and test this area of support first. Likewise, the market to break out to the upside then come down before making any appreciable move. Otherwise, it’s just trading support and the resistance for now.
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