I realise I’ve been a bit re-miss with not posting enough charts recently – its been a busy start to 2013 and I’ll look to get back into the swing of blogging about my trading.
So GBPUSD -Lets have a look at the weekly chart.
Throughout 2012 GBPUSD could just not get above (and stay above) the 1.6300 handle. You can see at points 1,2 &3 that it always fell away. The final example was point 4 towards the end of the year. It pushed higher than previous attempts but rolled over and fell away presenting us with not only a good No Touch Barrier Trade above 1.6350 but also printed a bearish engulfing pin bar – a telling signal that there was a good chance of a downtrend coming soon.
The first week of January I was sat in an Irish pub (trust me it was the only place with wi-fi) discussing this trending possibility. Whilst there was a strong supporting trendline (purple line) if price was to break this and close the other side then the likelihood of a downtrend increased. Allied to this was the fact the GBP had been sliding down the Strength Matrix over the previous month.
Price did indeed break the supporting trendline, close the other side and has been in free fall ever since. Whilst the Daily chart has provided very few entries the 4 hour chart has offered several good ones.
On one or two occasions it’s required an Attack – Re-Attack approach to get into the position but its been worth it. Price has been in a STAM 1 Selling environment for most of 2013 which has added to the confidence to short the Cable.
The last day or two has provided some reversal opportunities (for those who like to try and pick bottoms) but price has just pushed on south again like a run-away freight train. I’ve learn time and again not to fight the STAM and that’s been a profitable and emotionally sensible approach.
Has the trend neared the end? I have no idea to be honest. It’s presently pushing through the weekly 161% Fib extension (@1.5503). I suspect there are a lot of orders between 1.50 – 1.55. Perhaps it will reach the 2012 low at 1.5231 – who knows? I gave up making predictions years ago! I’ll just see how it goes.
I hope you’ve managed to harvest some pips from this lovely run.
Till next time, trade well.