ATTENTION: 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. [laughs] Today was a very interesting day. I’m chuckling because I wound up spending most of the day on the phone. Sarah had just come in, and I was talking to her about how I was on hour number seven, and so I’ve really only had one eye on the markets today. Equities were fairly flat. We saw the market pop up a little bit, much like the British pound here. The equities popped up off of the low, much like this, and then went flat. So, once again, the British pound is mirroring the US equities market.
We are still in this whole consolidation mess. Remember, yesterday, we were talking about this pennant pattern that was building. It has done, if nothing else…
It continued to be sloppy. [laughs] For some reason, I forgot all of my English lessons. But, what this means is that the compression is continuing. That’s the important part is, we have you could call it a very sloppy flag pattern, a sloppy trading lane, pennant, whatever you want to call this. Again, the semantics aren’t as important as realizing what has been going on.
And what’s been going on is this continued snaking‑sideways action. I’ve made rumblings that we’re going to be merging content with The Insider code. And in the new content that we’re taking from the plus side ‑ basically, we’re taking Plus and merging it with The Insider Code for everybody.
And there’s a concept that I teach over there called the weave, and it’s when you see moving averages crossing and recrossing very often. And so, about once a session, you could see, here, the moving averages crossing and then recrossing. What that is is a very simple, quick check to verify a sideways‑compression market. And so, in cases like this, where we maybe have a bit of a sloppy pattern, we can confirm the compression by looking at our moving averages and seeing that they’re weaving in and out of each other. This is the 60‑minute chart, by the way.
So, continued compression on the British pound. We’re not getting much in the way of a pattern, although we are looking at a triangle pattern, once again, coming into the Asian session. And so this will probably dribble out coming into the European session.
However, if I were you and I were trading the European session, I would be looking for a breakout. So, what I would look for is the European session, if it’s near the low here, which is about 45.78, or the high up here, which is about 46.90, and it’s near the open, I would expect a breakout. And so, on the low side, the market is hunting down towards 4500; on the high side, potentially breaking out back up to this 4700 level.
Other than that, really no patterns to speak of. Counter‑trend trading, again, is notoriously difficult in that regard. And so, until we get a clear direction, we just have to play it, not by ear, but play it off the cuff, as we see the patterns setting up.
