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 still have some problems with our data. We’ve at least narrowed it down. You can see here, the daily bar. We’ve got this huge candle. We at least know it’s not our error. So Barchart, literally, without telling any of their customers, changed the way that they deliver data. So we’re scrambling, trying to make a fix, trying to figure out if it’s a mistake on their part or if it’s going to stay and if we have to make changes to our code. So that’s the reason for the big bar over here.
If you remember the last video, we were talking about the pennant pattern here. If you can see, it did break to the upside. Remember, on a conservative basis, we’re waiting for the market to come back down and retest. This, by the way, is a four‑hour bar. You can see that the retest is in progress. We’re getting late in the week. We’ve got a couple sessions. Well, a session and a half, really.
Wednesday is going to be right upon us. It’s 8:00 Eastern time now. We’re in the Asian session now. Once we get through London today, Thursday’s session, and then, essentially, Friday, there’s no bottom. So, we’ve got to watch for support coming into the British pound, at about 5734. It’s not too far from that. Now, if you look at where this bar is closing, 5770. So, just about 20 to 35 PIPs to the downside, and we have to start looking for support.
The way that looks on the hourly is going to be with price coming into… Let me just get a rectangle here. All right, let me draw it this way. There we go.
The price coming into this area here. Now, what I’ve done is we have the high here, and then we have the close of this spike to the upside. We need to watch price as it comes into that whole region. You can see, it’s at the very topmost edge of that now. It’s never a good idea to try and pinpoint this stuff right at the top, because that represents the extreme, not necessarily the true range of where the sellers wanted to come in.
Remember, what we’re doing here is watching for support. And support, by definition, is going to be the buyers coming into the market. So that entire area runs from right about 5764 down to around 5720, so there’s about a 40 point range where we need to watch for support.
The way that, hopefully, will play out in the marketplace is we get the market moving down, coming up, and then coming down again, so that we have a nice flag pattern or a very tight pennant pattern coming into the marketplace. That compression is what indicates that the buyers and sellers are lining up, so to speak, on both sides of the fence, getting ready to trade.
Unfortunately, what that means is we can’t plan ahead. We need to watch, because there’s no pattern. That goes for either the long or the short side. Other than that, if the market does break below our low here, we’ve got a short potential. That is coming in at about 5641. But again, you’ve got to be careful because there’s all of this support coming to the downside, and so you’re going to have watch out for whipsaw trades, you’re going to have to watch out for very fast reversals, all the way down to 5548.
Now, if, in the London session, the British Pound does manage to break to the upside, we’re looking at long trades above 5796, and really coming into 5815, because you don’t want to get too close to the even number, because that’s where folks can put their stops. So I tend to want to look above…
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