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, today was eventful a lot of currency pairs. At first I thought the pound had a fairly tame day, but really we had some excellent moves here. You can see on a break below 5750, the market got down to 5650. Now, if you recall last night when I was talking about what we were looking at with the pound, we were right about here. Not a lot going on that that time. I said we would have to look at the market and watch for a particular short. Of course, going short below this level here was the conservative move, but the market just never got there.
You can see, though, that into the European session you had a very nice double top here along with the support level that did get broken, but if you were looking for a long trade and not really focused on the short side, it is perfectly acceptable to just not even look to get in short as the market is moving down.
However, now that the pound is climbing down below 5650, we do need to watch out for a return to, possibly, the 5570 level or even the 5550 level, which would be back down to these prior lows. You can see that the little dipper did fail. Again, as with all of the patterns we look at, there are going to be times that they fail. There are going to be times that they work. This was one of those times where the little dipper did actually push through.
However, this is why we always look for both sides of the trade. Having said that, with the move to the upside right here, at least the first position would have been just into profits. Taking a long trade here above 5782, the market got all the way to 58 ‑ let me see what the high was here ‑ 5816 before coming back down. So it at least would have put us into a profitable ‑ or rather profits on the first portion of the position, the remaining position, of course, getting stopped out at break‑even.
Being that we’re coming to the end of the week, we’ve got one more trading session, which is Thursday. What we need to watch out for, now, is if the market ‑ rather, we need to watch out and see if the market is going to catch support ‑ whoops, that’s not what I wanted. There we go. Catch support right here in the middle of the range, or if it’s going to continue dropping to the bottom of the range here.
So coming into tomorrow’s session, we do have a valid short entry below 5632, but remember, the market is coming into a very heavy support area, so you’ve got to watch out for whipsaw trades as well as false breakouts.
Looking for a long trade, the market has got a ways to go. We’ve got to break back above this double top up here, above 5810, before we can even think about looking at a long trade. You can go ahead and go to the daily bars here. You know what, let me go four‑hour.
Yes, as you can see, we’re still having a little bit of a problem with our data. We are talking to our data provider. In fact, we just finished coding, we have available to us four more data providers, which will help to solve some of these problems.
Looking at the four‑hour bar, you can see ‑ ah, that’s a bit too far in; let’s just leave it here ‑ looking at the four‑hour bar, you can see that we’re basically making a little dipper back into this prior resistance area back here. And so what we need to be aware of is if that little dipper plays out ‑ in other words, if the market is testing this resistance area ‑ then we will get an extended move to the downside. That pegs the pound going right back down to 5300.
So we’ve got to watch on the downside for a potential trend, but as I said, we’re coming to the end of the week. We’re probably not going to get a huge trend in one day. So I’m not going to hold my breath waiting for the pound…
Comments on this entry are closed.