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, it was another long night with the boy. He was up with some stomach pain, so I apologize again for being a little bit slow. If you recall, yesterday we were looking at this massive downswing here in the marketplace. We’ve now got a very good pennant pattern forming on the hourly bar right were we would expect it. If you remember, we’re down in our support area, our support zone. Short trade, we’re still looking for something short below the low here, which is 5395. The long trade, the reason why it’s going to be more difficult is because we’ve got this sideways consolidation right above those prices, and you see price pushed up into that region already and got rejected. So you know, if you take a long trade, it’s not going to ‑ it’s a bad trade, you just have to be ready for the market to turn around very, very quickly, And you can see in these two hourly bars just how fast the market did turn around.
So the long trade there, really, to be conservative would be above the high here at 5454, but if you are an aggressive trader trading about 5444 ‑ well, I know it’s only about 10 pips different, but still, if you’re more aggressive, trading about 5444 is perfectly fine but, again, just aggressive. You can check out the trend trading checklist to get strategies for making those adjustments. That’s going to be in the quick start. You can also go onto disc number three and disc number five to get some examples of how to trade this exact pattern there.
Really, until the market breaks below our low over here at 5371 or above this high, which is about 5575, the market is probably going to be just stuck in a range. Let’s go up to our daily bars here quickly. Here we go. And you can see that we have the sideways area here, the market has broken out of that sideways action a couple of times ‑ actually more than that: one, two, three ‑ this one was fairly long ‑ four, five.
This is where, if you will recall, I said, when it’s looking like a little dipper, now here is the break to the downside. The second little dipper came right over here. This was last week, where the market retested this extreme support area here and the extreme support area over here. So now you can see we’re just getting this momentum move to the downside.
What’s interesting is if you look, visually at least, we’ve got some very fast sell‑offs, right? The market almost looks like it’s going straight down over here, which ‑ that basically is what I look for when I start waiting for the market to make big moves to the downside. That’s why I keep saying, going ‑ actually, it’s a little bit higher than that ‑ going down to about 5300, which was right near the low. But now 5000 is going to be the next target, not only because of the number 5000, but because we have some support on the extremes over here.
Remember ‑ well, if you were part of the crew back then, if you were, you remember I talked about this bottoming pattern for about six months. It’s just kind of meandering along. So this flag pattern which is forming here, I like the flag itself to be shorter than the overall pole. We’re getting pretty close here, meaning here’s the pole and here’s the flag, OK? So lengthwise, we’re getting about the same size.
That’s usually not a good sign, meaning we’re not getting aggressive buyers coming in here pushing the market to the upside.
So again, momentum is slacking off. It looks like the pound is just in for another downtrend coming back into support, maybe even down to the 4000 level.
Comments on this entry are closed.