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.

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. Mac here. We had just an absolutely smoking one‑on‑one support session that you are going to want to check out. It should be uploaded onto the site very shortly. I’ve got to apologize for seeming a bit off today. Both of my boys were very sick last night. Having just come off of a ruptured appendix myself, I was pretty scared when Jayden, my oldest boy, was complaining of stomach pains. I mean, he was literally up all night. I was holding him on the couch. The poor guy was just moaning. Anyway, so I’m a little bit tired. My comment would be if something like that happens to you, don’t trade the next day. It’s just not worth it.

But let’s check out what the British Pound did. We’re going to take a look here at the 15‑minute chart because it shows a lot of the volatility that we’ve experienced in the last couple of days. You can see the pound, as it came off of this high, was very, very volatile. These 15‑minute bars are very large, which indicates an extreme selling pressure.

What does this mean? What it means is if we come back into these price levels ‑ and by these price levels, I’m talking about 5560 down to about 5460 ‑ because of the way price acted, you’ve got to look at that and say, OK, nobody was willing to be a buyer inside anywhere in this zone.

Now, I realize it’s a huge zone. We’re talking about 120 pips. But that’s just the nature of the market. So for whatever reason, we’ve seen the British Pound counter a raft of selling. Now, what we talked about on the one‑on‑one support session had to do with planning and some other things, but I think more importantly you can see that we had the British Pound trading in a sideways market inside of this blue rectangle. And if you can look, the pound traded right to the bottom end of that extreme on that zone.

In fact, let me put this right there. So now ‑ you know what? Hang on. Let me zoom in, because I realize you may not be able to see that very well. OK. What I’m looking at is this, right there. And so what we’ve done now is we’ve identified the extremes of the sideways action. What do I mean by extremes? I’m talking about the low here and then the close here. There’s a low there, close here, and a close there.

So, what happened was the pound had come up right into what used to be the extreme, in terms of support. Again, what I mean by that is here, when price got into this zone before, there was so much buying that the market just instantly turned back around. Came back down, instantly turned back around.

It hesitated over here for about eight hours before breaking through. And so as it comes up to re‑test, we can see the selling comes in. So the buyers who were over here more than likely just completely gave up on this end, and this would be the little dipper. OK? So the market came down, now it’s giving us a little dipper, and so there we see the British Pound coming off.

Here is what we have to watch out for. We’re coming ‑ there is the compression pattern, there’s the pennant. And so we’re back down into support here on the four‑hour bar. You can see on the daily, though, there is not too much to the left‑hand side.

So as I said last week, and really, even, before that, once the market broke through this low ‑ which was, I believe, in September, October of last year ‑ there is not much holding the market up all the way down to 5000. So we could still get another 3‑, 400 points to downside. We’ve got to keep that in mind.

However, from a pattern standpoint, we do have a compression pattern. It’s giving us a really solid entry. Let’s go ahead and ‑ hello, come on. Come on chart, quite messing around. There we go. We’ve got the pennant pattern here. You can see it much better on the hourly bars.

That’s the compression we’re looking for. That means we’ve got long trades above our high over here, which is 5474. Keep in mind we’ve got the consolidation very close. And so watch out for the possible whipsaw trades over there. Short trade below 5404, again, support very close at 5360. So these aren’t autopilot trades unless you’re willing to take smaller size.

You’ve got to check out the one‑on‑one support session from today. I know it’s long, it’s like an hour. Go to the last 15 minutes, because we’re completely revamping how we do the one‑on‑one support sessions. I think you’re going to be absolutely thrilled with the way these one‑on‑one support sessions are going to be handled from now on, because they’re going to provide you with what you need to be successful.

You may or may not know, but I spent a week in Columbia. I talked to a group that does Forex coaching for professional traders, and they have a program which has produced 18 straight weeks of profit for their Forex traders. And I’m telling you folks, these are not ex‑Wall Street guys. These are Mr. and Mrs. America. I mean, these are people just like you and me that are turning out consistent profits in the markets.

So please, if you can hear my voice right now, stay tuned for the improvements that we have coming down the pike. You are going to be absolutely thrilled with what is going on. I’ve just contracted with another development team to make changes to include what I experienced down in Columbia, so those are in the works, but we are making these changes now, starting today. So come into the support sessions from here on out, I’m begging you. Your trader performance will see an absolute rocket ship improvement if you do that.

So anyway, sorry to get so carried away there, but let me recap. Short trades below the lows here at 5400, roughly. If you want to get the exact low to ‑ whoops, there we go ‑ if you want to get the exact low, we’re at 5395, selling below there. On the long side, it’s going to be above the high, 5454.

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 nice, big surprise last week with the Fed raising their discount rate. One of the things you have to understand is that there are several different interest rates that the central bankers control. One of those is, let’s say the public interest rate. In other words, the interest rate that will effect the loans and credit card debt. And then there’s the interest rate that effects banks. If you don’t understand how central banking works, in essence the central bank will loan money to other banks literally for one night. And the system is kind of crazy when you think about it, but let’s say we divide up a day into two halves. And this is let’s just say midnight. Well, let’s say a bank is required to have $500. OK? And that’s their reserve requirement. And let’s say that they actually have $300. Oops.

Well, what happens is at midnight the federal reserve is going to look at the bank and say, OK. How much money do you have? Well, we only have 300. The fed is going to say, hey, you were supposed to have 500 and whatever. They’ll come in and audit you or something bad is going to happen to you. So what happens is, instead of going over midnight with only $300, the bank will borrow $200 in the overnight market. And literally, they’re holding it overnight. So the Federal Reserve, it says, how much money do you have?

The bank says, hey, we’ve got $500. The Fed says, OK, no problem. And so they go over the next day, they pay the $200 back, plus interest. And so, strictly speaking, they may have let’s say $294, because they had to pay $6 in interest. That’s essentially the rate that changed was the bank to bank interest, basically. Does it effect the public? Not directly. You could say indirectly because the bank’s cost is going to go up. I’m not buying any… I mean, the banks are going to charge whatever the heck they can get away with.

What’s most important is what happened here, meaning what happened with price here with the British pound. You can see the British pound went down, meaning the US dollar got stronger. What this means is that the market is looking to the US dollar being more valuable in the future than the British pound, even though the Fed came out and tried to say, hey, look. We’re going to try and be upfront with you guys, meaning the marketplace. We’re not entering into a tightening bias. What that means is they were trying to tell people, look.

We’re not going to be raising the interest rates on the US dollar, which brings us almost full circle. One of the things you have to remember about currency is that currencies are driven by interest rates. If the British pound pays more interest than the US dollar, it’s going to go up. If it pays less than the US dollar, it’s going to go down. And so with the pound moving down, we have at least an initial reaction that the US dollar will be paying more interest rate as compared to the British pound somewhere in the future. Now, having said all of that, all of our techniques still hold. All of the support and resistance.

In fact, you remember I was talking about going short up here, watching out for a little dipper coming down into this area, taking the break on the bottom. So either way you slice it, there were some very good trades as the market was coming down. Whether you were an aggressive trader and you sold up here, or you were a more conservative trader and you waited for the market to come back up before you sold. Either way some great trades that wound up being almost a trend type of trade, meaning there was enough momentum to move down so that you could have had more of a position on.

And so if for some reason you didn’t catch the trades that were in here, I would suggest going back to last week, reviewing the videos that I talked about. And even the week before, as the market was coming into this pennant pattern, and I was discussing the positions that were available to us. It also highlights something that’s very, very important. When we were talking about the pound in the 16th of February. Remember, we were looking for the market to go up, but at the same time we were preparing ourselves for the market to go down.

It’s that plan of capitalizing on either direction of the market that will enable you to get in when you should get in to capitalize on these big moves. So if you didn’t get the trades that were over here or the trade that was over here, then go back last week, review some of those setups, or come into the one on one support session of this week and we’ll talk about some of the possibilities that came up in this area.

Now, coming into tomorrow’s trade, you can see on the four hour chart that we do have some compression right here. This is a very sloppy flag pattern, but a flag pattern none the less. And so we’ve got to be on the lookout for a break one way or the other. Of course, we’ve got this short term down trend that we need to consider. So going over here to our one hour bars, this is the sloppy flag pattern that I was talking about on the four hour that actually has more of a pennant pattern look to it. But either way you slice it, it’s compression. OK?

So here’s what we’re looking at on the long side taking trades above 5519. That’s going to be above our resistance level right here. Short trades… Oops, lost my mouse there. Short trades are going to be coming below 5455. So around 54… Let’s see, this is… Yeah. 5451. So coming into 5448, even at 5450, if you’re an aggressive trader is a possibility because we have a bit of a vacuum area coming in here. There’s a little bit of consolidation we’ve got to work through, but I think just looking at the chart patterns here.

If we can break below that 5450 level, we’re going to be challenging the 5360 area for the retest. If you’re wanting to be more of a conservative trader, of course the way you play that is you wait for the break below 5450 and then wait for the market to come up and retest. Then the entry is on a three bar reversal, if you want to be more aggressive. Or waiting for the market to make its little job there and going short below the low.

Again, if any of that’s not clear, I talk about this on December three in the Inside Code kit. I also talk about it in the fast start, or quick start session

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…

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…

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 are looking at the British Pound on a weekly bar again. Now you remember, we were talking about the possibility of the market making a little dipper push back into this prior area of resistance, and now that price has broken through, what was support now becomes resistance, and we just need to keep our eye on price attempting to push through and, also, the follow‑through. Now, what we might wind up seeing ‑ and I’ve been talking about this for at least a little while ‑ what we might wind up seeing is the market essentially working itself into a bottoming process. And if you remember, I’ve talked about this before. A bottoming process is where the market will make pushes down. Usually, you’ll see whipsaw trades on the bottom. Eventually, the market will kind of make a support area while at the same time pushing and making whipsaws to the upside as well.

Basically, what is going on is the players in the marketplace are all trying to conceal their actions. So if the buyers are coming in, they’re not making it easy. They’re letting people sell it off. They’re pushing the price up and selling against their own position. It’s just a very confusing and chaotic time. And so what we’ve really got to keep in mind here is this is a countertrend trading market which, if you go into the quick start videos, you’ll get the checklist for that type of market.

And until we get a clear move to the downside ‑ let me see if our ‑ we’ve been working on our data here. For some reason our daily bars were kind of screwed up. Let’s pull this down, down. See, it’s still screwed up. So let’s go to the four‑hour bars. When we go to the four‑hour bars, what that will enable us to do is to see over time how this market has been performing.

Now you can see lots of little bars, right? Little ranges, little ranges, market being pressured. So we’ve got this area here we have got to watch out for as far as a support level, and coming up onto the upper side, onto some of these higher prices, we’ve got an area that looks something like that. So let me go ahead and get my square tool. And we’ll draw it again. OK. Right there.

OK. So now we’ve got our support area and our resistance area both. Let me move this up just a tad. There we go. So, how do we trade this? Well, we’ve got a fairly wide area in between, and all we’re expecting is that if the market gets down into or close to this squared‑off area at the bottom, which on the topside ‑ again, this isn’t ‑ we’re not trying to get this into a pinpoint accuracy. But when the market gets down to about 5590, 5600, we need to start looking for signs of a reversal, and when the market starts to push up towards about 5720, 5750 or so, we need to look for signs of a…

Those signs are going to show up in the form of patterns. You can see here on the hourly now we’ve got the very beginnings of a pennant pattern. That’s the compression we need to see for a possible breakout. And we might push up, we might push down. So for now, we’re looking for a short under 5686 to the downside.

You’ve only got about a 30‑pip run before you start to get into support here and over here, so keep that in mind. We might get a very quick run down, and then boom, the market just pops right back up on you. On the upside, though, we need to be looking at going long, 5710. But really, getting above this high point is going to be the most prudent, 5719. But then also keep in mind you’re coming right into resistance.

Like I said, countertrend trading. If you want to play the countertrend trade, then it’s going to be a matter of letting the market trade down, waiting for a little dipper back up towards 5700, and then getting in on the market moving down. For the downside, then, it would be only waiting to go long once the market gets back down, again, to our squared‑off area that we’re looking at on the four‑hour bars.

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, I want to take a look first at the British Pound on a weekly. Really it’s because we’ve got this crazy stuff going on with our data, and our daily charts are just not acting right. But also, I think the weekly is giving us a much better picture. Remember, we’ve been talking about this zone down here. OK, let me draw this across. And I think what is important for us to take away from this is the market has broken out at the bottom and it’s now hooking back up. What this means is we’ve broken through support and we could be looking at a little dipper re‑test on a much higher timeframe.

And so when we’re trying to judge ‑ or, I should say, gauge ‑ our trading strategy, our outlook, I’m going to tell you, when the market breaks out of this big consolidation area, we’re either going to be getting a move quite easily down to 4400 or we’re going to get a breakout with prices moving well above 7600.

And you’ve probably heard some ‑ I was going to say some guys, but that’s not very descriptive. You’ve probably heard traders talking about how you can measure the distance, for example, of a breakout area in order to get where the market may go to. And so that is where I’m getting about the 4400 level. This line here represents, roughly speaking, the distance of this total consolidation area.

And so if we do get a break down, you can see it’s pushing down towards the 4400 level. This is by no means some kind of exact science where we can tell down to the pip where the market is going to go. And you can see up here breaking above 7600. So we need to keep this in perspective as we watch the market trade.

So, let’s take a look at the four‑hour bar. And keeping in mind, going back over here to the weekly, that we’re not going to see very much on the four‑hour bar, because essentially we have this huge vacuum area. Can you see that? Once the market gets into trading below 5600, it really is all the way down to 48 before we have any sort of decent and recent support. So we’ve got to keep that in mind.

All right. So here we go with the four‑hour bar. It’s really hard to see because it’s zoomed so far out. Let me do it this way. The USD, then we’ll go to hour. I’ll just go back a few months. I don’t know why I just didn’t type that in. Right, so there we go. Now, let me make sure we get it all in here.

So we’re looking at the four‑hour and the one‑hour. I’m trying to draw a box around this, so hopefully it will come through on the video. This is the four‑hour, this is the one‑hour. Of course, the one‑hour is giving us much more detail, right? You can see ‑ actually, let me verify that before I go… There we go. Ah, yes. All right. One hour, four hour.

So again, this is the detail. You can see, basically, a trading lane forming like this: boom. That is really what I wanted to talk about. We’ve got ‑ this is the overall flag pattern that ‑ I was going to have this big, dramatic build‑up to it but decided not to. All right, let me zoom back out. Whoops. All right.

So, what are we re‑testing? Well, if you remember, if you were in the crew back here, I was talking about the bottoming process for, I think six months. It might have been a little bit less. And I also made the point that we made such a large move down that the re‑test may take months. And I urge you: go back. I’m not blowing smoke up your skirt: Yes, I’ve been talking about that, have talked about it a long, long time ago.

Anyway, whatever that’s worth. So here is the flag pattern. It is certainly taking quite a while to form up. The reason why I point the pattern out is because if, indeed, we are looking at a compression pattern and a re‑test of this huge support area, then we could very well get a very aggressive move down to 4800 only to see the market just rocket back to the upside because the sellers are finally just washed out of the market. We’ve got to keep that in mind.

However, when I talk about the market moving back down towards 4600 or so, 4700 certainly, that is still sound. We still need to be on the watch for that. I’m saying from a strategy perspective and getting our mind wrapped around what the market may do, it’s important to recognize that we’ve got a good‑looking flag pattern up here on the one‑hour chart when we’re zoomed all the way out.

Now, let’s take a look at what we are going to do right now. This was the consolidation I talked about yesterday. We got the break above the high there. Of course, aggressive traders were rewarded and everybody else just got to watch. There is nothing wrong with that, folks. If you look at this trade, there was an extremely fast move to the upside that had an even faster retracement right here. The market came off of 5744, came back ‑ what is that 40, 60 pips? ‑ in just a couple of hours. So it was very, very quick that the market came down.

We did not get a very decent little dipper at all. And sometimes the market does that. I wish they were all easy. I wish I could tell you exactly what the market was going to do, but frankly nobody can. Right now, though, let’s go back to yesterday’s video. What are we trying to do? We’re trying to confirm either the existence of buyers or not. If the buyers down here are serious and they’re big players, you’re going to see this market turn back around, come to 5640 or so ‑ maybe even a little bit lower ‑ and then push to the upside.

So if you’re not in, so what? The conservative ‑ again, if we focus on ‑ you know, let me not even go there. Let me say something different. Ultimately, you’ve got to make the decision: do you want to action, do you want the thrill of the trade, or do you want to make money? Because oftentimes it’s difficult to do both. Yes, had somebody been in there and been aggressive and just been willing to get in with no confirmation or very little confirmation, the trade would have worked out.

Is it good? Is it bad? It’s just different, folks. I prefer to use a conservative basis. I’ll let somebody else take this trade, because I have seen plenty, and I mean plenty, of trades like this one back here, like this one right here, like this one right here. Let me switch up to the four‑hour bar. Like this one. Like this second peak. Like this second peak. I mean, there are all sorts of trades that it just doesn’t work out on. That’s just how the market works.

All right, now, as far as a short trade, I need to see some kind of flag. I need to see a pennant pattern. I need to see some sort of compression before I’m willing to get in front of this support level and then this momentum. But, if we do get a move down here, about 5567, 5560, yeah. I’d be willing to take a short down there, realizing that I’ve got support very, very close at 5556, and then again down here on the low, about 5540. Right about there.

So again, short position is open. I’d prefer to wait for a compression pattern ‑ flag, pennant, something like that ‑ before I decide to get it.

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, it has been a very active last few sessions. Now, what do I mean by that? Well, we’ve gone from a distinct down trend. We’re looking at the 15 minute bar here first. So, we’ve gone from a distinct down trend to this chopping back and forth motion, but this activity has, at least, been far ranging. Look at this. We’re going from 5560 to 5650, almost a hundred points top to bottom. Now, the reason why this type of trading can be so confusing is because the market is trying to transition. All right. Remember, if there are more sellers than buyers, the market goes down. If there are more buyers than sellers, the market goes up.

So, if we’re dealing with a liquid, active, world‑wide global market that goes sideways, what the heck does that mean? Well, it means we have both. We’ve got the sellers pushing the market down from the top. We’ve got the buyers trying to push the market up from the bottom. Nobody at this point is winning.

What that means for us, my friends, is that we have an opportunity because at some point one of these groups is going to be wrong. If that’s the sellers, then you’re going to see the market break to the upside. If that’s the buyers, you’re going to see the market break to the downside.

Now, where a lot of traders can go wrong‑‑let’s shift down to the four hour bar here. Let me zoom in. Where a lot of traders can go wrong is when the market trends like this. We’ve had a nice trend from 6400. The second breakout which we were talking about back in January came just above 6100, and so call it 650 points worth of market move, worth of trend.

When that happens, the rookie trader and some professional traders alike start thinking like, wow this trend just has to keep going forever which we all know and we can say, “We know it’s not going to go forever, Mac. What are you talking about?” But then, we trade like it is. We start thinking like it will.

And so, what we have to start doing is transitioning once we see sideways markets, these up and down markets. Actually, this one went down; popped back up; down. In other words, it looks like this: boom, boom, boom, boom. We’re getting this W bottom. When we start to see this, we need to sit up and say, “Hey, looks like we’ve got compression. Looks like the market is trying to put in, at least, a short term bottom.”

Now, let’s go over here to the‑‑my daily bars still have errors on them. I don’t know what’s going on with that. Let’s go over here to the hourly. Let’s zoom in a little bit more. All right. So, what we can see here is more detail. We’ve already seen this on the 15 minute bar. Really, we’ve got to draw the pattern like this for simplicity sake, and what we have here is a very sloppy flag pattern.

We’ve got the market kind of poking out on the top. It’s kind of poking out on the bottom. Again, it’s not a nice, neat picture, but it’s still telling us that we’ve got compression. We’ve also got this. Whoops, let me use the straight line right here. That’s what this is. This is a wedge, right? Things are coming up from the bottom here. We’ve got the buyers coming in, pushing the market up at the same time that the sellers are being aggressive and pushing the market down.

Either way, it just points to more compression. The buyers are now becoming more aggressive. The sellers are meeting that aggressiveness, not with enough force to push the market down but certainly enough to hold the market in place.

What does all this mean? Well, let’s go back to our four hour bar. We have a vacuum area now, really from about 5900 down to the top end of our breakout zone which is going to be at about 5660, so from 5900 to 5660. If we can get the market pushing above 5660, I’m expecting us to see a price of 5900 very, very quickly.

Now, I know these daily bars are really screwed up. I still don’t know why. Ah, 5600. Let me just make sure the prices are right. OK, they are. All right. So, let’s look at the daily bar. I realize that it looks like there’s just one day pushing the market down. We all know that’s not the case. My point is this. If the market does manage to break further to the downside, what we have here is a lot of churning, a lot of back and forth, a lot of buyers, a lot of sellers, a lot of people… I keep saying a lot. Let me rephrase that.

We have areas where both buyers and sellers were willing to draw a line in the sand. We’ve got one down here. We’ve got one right here. Whoops, that’s not quite straight. We’ve got one right here. What all of this means is that if the market moves down, expect it to be choppy. Don’t expect the market to drive all the way down and go back down to 3800. There’s far too much activity for that right now. So, what that means is I like the upside better, meaning as far as fast moves, as far as the market getting there very quickly versus what might be going on on the short side.

So, selling, yes there is this angled line right here. I think to be conservative that means we’ve got to sell underneath 5660 with a little dipper. In other words, we need to wait for the market to break below 5660; come back up for the retest or we need to wait for the market to break low‑‑our low’s here. That’s pegging it at 5548. That means the market break below 5548 and come back up for the retracement.

If we don’t get either one of those, because of the choppiness in the market I believe it’s better to stand aside. If you’re an aggressive trader and you can afford to get stopped out a couple of times in a row, yes it’s still viable for an auto pilot trade, meaning taking the market below the low over here which is below 5566 or below the low over here which is just below 5541. On the top side, things get a lot easier. We’re trading above the high over here at 5659.

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 seems there was another problem with the video. I’ve narrowed it down to my laptop, and since I’m going to be in the office for tomorrow’s session, I’m not concerned about it moving forward. But that problem will be solved, let me put it that way. If you will remember, in yesterday’s video we were talking about the support zone in the market down here. And what we were discussing was that when the market comes into a support, particularly where you’ve got recent support ‑ OK, so this was just a couple months ago or a month ago that when the pound got down into this area, it eventually did go up.

And in yesterday’s one‑on‑one support session, what we talked about was how we need to keep the mechanics of the market at the foundation of our trading. Now if the market has gotten into a zone of prices and then managed to move up from there, what we know ‑ and we’re not guessing at this, we know ‑ is that there were more buyers.

So if price drops down into that area again, we are going to make the assumption, then, in the future. OK, so this is what’s important. We observe what is going on in the past to help us make assumptions ‑ or, if it makes you feel better, predictions ‑ about the future. So that’s the basis for the trading strategy, which has been to essentially be long or at least be biased to the long side as long as the pound is sticking around this support area.

When we go over to our four‑hour bar, really, because the market has been going sideways for so long, you’re not going to see a whole lot of trends on the four‑hour bar. On occasion we can find a pattern over here, but really, what I want to emphasize ‑ let me zoom in just a little bit more, there we go.

What I want to emphasize is that when the market does move off of a support level, what you can find here on the four‑hour bar is that your target, or where you’re eventually expecting the market to stop, is pretty easy to find.

In fact, if we look backwards on the four‑hour bar, we can see areas during the day where the market has pushed down and, again, develop a zone of prices ‑ in this case running down about like this. There we go. Whoops, a little bit too low. In fact, let me get that arrow out of the way, too. There we go.

OK, so what are we looking at here? Well, we’re looking at the close of this little ‑ this four‑hour retracement, as well as some closes here, here, and then finally the low. Now, one of the things that we can do as traders is get fixated on certain things, and it’s because we’re trying to predict, we’re trying to get certainty, we’re trying to guarantee that we’re going to make money. And folks, it just isn’t there.

And so how you draw this zone, there is no magic in that. All we’re trying to do is identify areas on the chart where we can make trading decisions. That’s it. To try and do literally anything else is reading something into the chart that is just not there.

So if price does manage to get into this zone ‑ in fact, let me use a blue rectangle over here. There we go. Now I’ll actually put that on the chart. There we are. So, as price is reaching up toward this zone, we become interested. And you can see, sometimes price just doesn’t get there. This four‑hour bar misses the zone by quite a bit, actually.

Now, does that mean we missed a trade or we missed a target? Yeah, maybe it does. But the important part here is that we’ve identified a price area where there were previous buyers that were then overwhelmed by sellers. And so our assumption now is that as price gets into this zone that we’re going to see those same sellers either defend their prices, or we’re going to see the buyers back off because they’re going to be thinking, “Well, jeez, there were a bunch of sellers in this price area. We need to get out ahead of that price area.”

Again, remember, trading is based on traders. Traders are creatures of habit.

Now if we go up here to the hourly view, what we can see is very important and very instructive. And this is something that I’ve tracked for almost a decade now. It’s a trading strategy that I discovered back in 2001. In fact, this is at the heart of Forex Deal Butler.

What you can see here is that ‑‑ let me use a straight line ‑‑ the market starts here, moving up at an angle. And as it’s moving up, instead of being on an angle now, it almost looks like it’s curving to the upside. And it’s really better described not by the lows but kind of by the general movement of the market.

When you see any market get this kind of acceleration or momentum, this is where we’ve got to keep our eyes out for a possible reversal. And the reason why is very, very simple. If the buyers in a marketplace are flooding in very, very quickly, they’re not giving other people a chance to adjust to prices.

I mean, think about it. How many times have you been ‑‑ whether it was during the real‑estate boom, or maybe during the stock boom ‑‑ and you saw prices going up and up and up, and you said, “Ah, you know what? I could’ve bought that when it was $25. It’s $50 now. It’s just too expensive.”

And then it goes to $100, and then you’re thinking, “Wow. That $100 is way too expensive. I knew that stock when it was $25. I knew I should’ve bought that.” And then it goes to $150, and then $200. And finally, you’re thinking, “Holy crap, this thing’s going to go to the moon.” And then what happens? Boom.

Well, the reason why that happens is it’s the very nature of the markets themselves. Markets will continue to move up until all of the buyers ‑‑ well, let me say it a different way.

Markets will move up until the sellers can overwhelm the buyers. Period. Markets will move down until the buyers can overwhelm the sellers. And so the faster that happens, the more likely the reversal. Because the guy who’s a day trader back here, once he sees the British pound is up, say, 50 or 60 pips, he’s not going to jump in on that.

And I’ll tell you, very practically, why. Because if that day trader jumps in over here after the market has already started to move up, his boss is going to come back at the end of the day and say, “What the hell were you doing?” And if he does that too many more times, he’s going to get fired. It’s just the nature of their marketplace.

So, remember ‑‑ well, maybe you don’t remember. You need to look at the one‑on‑one support session. It’s up on the website. It should be posted already. Because I talked about, at length, how to plan for and make money based on knowing who you are trying to trade with or against.

Because if you’re a day trader and you see the market move up like this, you can’t get in, not because there’s no opportunity in the market, but because if the trade doesn’t work out you’re going to get your head bit off, and if you do it too often you’re going to get fired.

Now, there is the chance that this move will turn out to be the smart money. But here’s the thing. That is going to show up on the four‑hour, and it’s going to show up on the daily. In other words, the smart money is only going to get involved when the daily charts are in support, if he’s going to buy. And he’s only going to sell if the daily charts are in a resistance.

So if you’re trying to profit off of a big move, you have got to wait until the likely time that the smart money is going to be involved.

You see, the mistake that we can make as traders is that we assume that every time we decide to get into the market that the market is going to make a big move. Like this. We see the market makes this huge move, so we say, “All right, I’m going to get in over here.” And then we say, “All right, the market’s going to do that. It’s going to move hundreds of pips, and I’m going to make tons of money.” Well, the only way it’s going to do that is if you have big money willing to push the market.

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. There was a problem with the video last night, so I’m up early re‑shooting one for you. The British Pound ‑ we’re looking at a daily bar here and it’s zoomed way out, so I know it’s going to be tough for you to see a lot of the detail ‑ but what is important for you to notice at this stage of zoom is that the British Pound has come off of this high. So we’re in a short‑term downturn trend, but we’re also in this longer‑term sideways market, and it has been going on for, I believe, about ten months now. In fact, if you go back and look at the videos I shot back here in the early stages, I warned that in the currency market in particular you can get long, long stretches where the market is just going absolutely nowhere.

And so this is perfectly normal, but the one thing is this: because it has been going on so long, basically, the longer this goes, the easier it will be to break out of. Why? Well, because people get used to it. As humans, it doesn’t matter how bad it gets ‑ like you know, say, the Holocaust, where it’s just atrocious living conditions, to even something like what is going on right now in Haiti. Even as horrible as that is, it’s possible for the human organism to adapt to that environment, and it becomes normal. OK?

So we adapt very, very quickly, and we adapt very completely. So this long‑term sideways action is giving us this big, big congestion area, this big breakout area. And so if we do ‑ I shouldn’t say if ‑ when we get a breakout from this overall thing here, we can expect a fairly long trend to the up or downside. At this point, it is looking like more of a down move is in the works, just based on what is coming out with the news and the way the professional traders are talking up the market.

However, we also need to be aware that the pound has come into a support zone. In fact, it’s right about here. And you can see, earlier ‑ this was early yesterday ‑ how the market pushed down into that area and popped back up. So what we’re now looking at is a support zone on the short‑term running just underneath current price.

And so if you are shorting underneath 5908 right here, which is the low of this hourly bar, you’ve got it, but you’ve got to understand that there are some buyers out there, which mostly likely will force the market up on you. Now that we’re in the longer‑term support ‑ and this is all in the quick start videos, it’s also on discs number three and five ‑ now that we’re in the longer‑term support area, what we have to switch over to ‑ if you remember, as the market was coming down I was saying, “Well, the short side has got more room to move.” We have to flip‑flop that.

Now you can see we’ve ‑ the British Pound has this long area where there is not a lot of trading. I call those vacuum areas. Whereas on the downside there is a lot of support. So if price does manage to get above 5975, I’m looking for a break back up into 6140, maybe 6130. On the other hand, a break below the low down here, 5905, for the short trade, you’ve got to watch out for the trading all the way down to below this low here, 5864.

And really, the market has got to push through all that before it’s going to get going much to the downside at all. Now, if we zoom in here ‑ there we go ‑ if we zoom in here, you can see we’ve got the low here. We’ve also got the lows running all down through here, and then this kind of spike move. All of that is going on in this support area.

And remember, the reason why we look at these chart patterns is because they tell us a story. When these bars are pushing down and closing up over and over, day after day, what that’s telling us is that there are buyers down there. When the market makes a big push down and can’t stay down there for very long and comes right back up, again, that’s telling us there are buyers down there.

So as that process gets repeated over and over, we need to recognize that pattern. And you can see, when we come down into this area moving across over and over as well, we see the market getting down into these prices ‑ 5800 and up to about where the market is now. We see the market pushing down and then popping back up. So that’s why we’re looking for support here.

But really, now that the market has moved down into this support area, we need to start looking out for breakouts below 5780 or so, especially 5800, because if the market can get below there, then likely we have completely broken out. However, here is what we also have to watch out for: if you notice back here, the market was moving up along this angled line. We had basically a wedge pattern here.

And what I said when the market broke out down here was that we had a possible breakout, and I was waiting for the little dipper, and you can see the market pushed down and back up here. I thought that was the little dipper, but then what happened was the market did not follow through. We’ve got to watch out for that. In particular, after the market has gone through a long consolidation period, after we’ve had a trend run like this and we get this consolidation here, we’ve got to watch out for the false breakout.

When I talk about trend trading on disc number five, and even in the quick start where I talk about trend trading, these are some of the subtle nuances that, for example, with computerized trading can be difficult to pick up, but as a human being, of course, I can recognize these price patterns.

So again, just because we’ve broken out to the downside does not mean that price is just immediately going to make some massive trend move like this just to the downside. We’ve got to be prepared for a false breakout. It’s all going to depend on what the market looks like.

When this market broke out, it never looked back. When this market broke out, it had three days of downtrend, then it started to come back to the upside. So again, we’ve got to monitor momentum, we’ve got to monitor the patterns and keep our eye out for the likely scenarios.