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Technical View:

GBP/USD has broken out of a 6 month descending channel on the weekly chart to the upside. The initial bullish surge occurred at the key psychological level of 1.5 forming a triple bottom formation.

This suggests that the bearish pressure is diminishing and that we may see an established bullish reversal. A retest of the backside of the channel and 1.52 as new support will be confirmation of a change in sentiment.

Fundamental Picture:

1. Expectations for a timely Fed Rate-Hike are diminishing on dovish Yellen.

2, Expectations remain strong for a U.K Rate Hike

3. Governor Mark Carney retains Hawkish Tone

4. UK GDP within expectations for Q4 at 0.5%

5. U.S. GDP expanded by 2.2% in the fourth quarter of 2014, below initial estimates for a growth rate of 2.6% but above expectations for 2.1%.

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Depending on how the market will continue the reaction of Friday's news events, we might see the completion of this bullish cypher pattern or not.
Personally I will not enter with a limit order as there is no structure at the pattern completion, there is however some 10 pips lower (orange dotted line). If price reaches this point I will look for confirmation for a reversal as this increases our Risk/Reward ratio.

Let me know if you have any questions

In general, I am expecting a continuation of GBP strength the coming week, drawing support from steady economic growth with the revised GDP coming out as expected and recent labour market data coming our positive. The Japanese Yen on the other hand is under pressure with the BoJ revising their growth forecast lower and most of the recent Japanese data disappointing the markets. This pair has been on a strong bullish run since the beginning of February, gaining 900 pips and it currently sits around the 618 retracement of the swing low that started December last year, creating a zone of resistance. The recent uptrend is starting to lose momentum with price action on the daily trading sideways for the last few days and failing to print a higher high on the 4H after the last outside return, showing a clear bearish divergence condition on the RSI.

Could it be a top has been formed, at least for now? Its possible, because we may have a double top pattern developing on the 4H timeframe. It is not certain the pattern will complete, but I put this trade candidate on my watch list just in case. We have plenty of Japanese and UK data coming out on Monday that will give an impulse to this pair. I am describing the most conservative play here (known as the 2618 trade), with the most conformation possible. The scenario is depended on a number of steps happening before entering the trade and as such its a true “if… then… scenario”. A double top is a double top if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA tried to make a higher high, but failed. This retest of resistance with less strength also follows from the regular bearish RSI divergence at the second top.

We need the following steps to occur before entering a trade: (1) price breaks below and closes below the neckline, (2) price retraces back up, until 618 retracement of the prior leg down and (3) price stalls, stops and reverses at this retracement level. In that case, SL goes above the highest high of the tops. TP1 = structure level where the retracement started, TP2 = 1272 extension of prior leg down. In terms of trade management, when TP1 is hit I would take profit on 1 position and roll my stop loss to breakeven, enjoying a risk free trade hunting for TP2.

There are 200 pips to be made (if this pair follows all the steps in the script) and the trade has a reward – risk ratio of 2.2!

Have been preparing my traders
for a breakout. Scaled into a long position
over the past couple of days, and did my final
adds on the news that the first Bitcoin ETF is
approved. This is a nice catalyst to combine
with the technical pattern we've been watching.

DO NOT OVER TRADE. People assume the best traders are the most active ones, and that we sit around all day staring at hundreds of charts. It's simply not true, but people love to over-complicate things. Pick a few reliable indicators, fine tune them to your liking, and follow the signals. Ignore the herd sentiment, the "fundamental" news developments, and all the noise. Trade what you see. Only price pays.

Less is more ... We have 2 potential bats setting up here on the hourly chart. We'll check if one will complete and which one it will be ... but we are prepared for both directions :)

Hey People,

we just saw another Huge Short going on in the EU Pair.

Now we approaching former Support Zone again.
I did the combo of DXY and EU now.

What we do see on the DXY is a Wedge sitting at its top trendline now.
According to Fibonacci Extension of last prior move, we could see a little more Upside and then back to the lows, wheren we can buy DOLLAR again and sell EURO.

THIS comes perfectly with my E/U Chart, because a little more upside for the Dollar would mean E/U to drop to the buyzone at former Support zone.

SO 2 ways to play this.
Buy E/U NOW and set SL below the former lows, OR wait for price to come to your Buyzone and enter then.
Targets at 1.13000 and 1.15000 depending on DXY. Check where it sits when you close the Profits.

Rest should be obvious according to the Charts :)

Questions, Suggestions and Ideas WELCOME :)

Have Fun!

This is a revised version of the chart I published a few days ago. Scroll over to look at the similarities to last May. Short term I think we could retrace to bounce another time off the linear-scale downtrend line (resistance-turned support) at around $235 on March 4-5. Second bounce might not happen though. Then a few weeks of consolidation followed by a break up to test the log-scale downtrend line at about $310-320 sometime at the end of the month.
https://www.tradingview.com/x/wDcdlWwV/

Target after bounce, shown on log chart. Should break up to test downtrend line, which will coincide with the peak at 305-310
https://www.tradingview.com/x/VSVOc4Q2/

Normally I rarely trade any butterfly patterns, but as this one should complete around previous structure I might give it a try. Stop loss is a bit tricky in this case as we have to go and check for previous structure. The risk reward ratio is not great, all depending on how you enter the trade. If for example a double bottom would form at pattern completion, we can place the stop loss a lot close to our entry, completely changing the Risk/Reward ration to our benefit.

A cypher pattern is forming on AUDUSD with a Fibonacci cluster at a previous minor support level.
The Risk/Reward ratio is not terrible with a 1.25/1 and a 2/1 for targets 1 & 2 respectively.
However, if we can manage to find an entry reason based on structure to ride down to the pattern completion (eg. break below & retest the 0.7780's) we can make much more out of this potential pattern.

See if it fits your trading plan and may the pips be with you.

This is an update of previous post.
Im still long, looking a H4 chart we see a series of HH,HL sequence.
There is an inverse HS pattern also, wich suggest a change trend.
Good luck.

TEST YOUR TRADING SYSTEM
I will not go deep into this, because it quickly becomes a shouting match on who has the best system, which is usually more about ego than fact. It is sufficient to say that I have seen / know of profitable traders who use fundamentals, price patterns, Elliot waves, renko, moving averages, structure levels, pitchforks, trend rules and custom indicators. I will not get into which system is the best, because I have not back tested them all personally. This does not imply that it does not matter what system you use. Far from it. You need a system that gives you an edge. And the only way to know if it does, is to back test it against a relevant amount of data.

ADD FILTERS
Adding filters to your strategy aims at improving your win rate by eliminating losers. It’s a way to get the odds on your side over a larger number of trades. Examples of filters you could add are: trade with the daily trend, trade with the fundamental direction, filter out unprofitable patterns, don’t trade during news events, only trade reversal patterns that complete at a key structure level, only trade breakouts after a retest of the trend line, add an extra indicator (e.g. stoch or sma line crossover or rsi divergence) or use a particular candlestick as a final entry signal. There might be a price to pay: if a particular filter delays your entry point, it can improve your win rate while reducing your reward – risk.

INCREASE THE OPPORTUNITY FACTOR
The opportunity factor relates to how many trades your method allows you to take per day / week / month. If by adding filters you are left with just a few possible trades a week, your win rate can go up, but your overall profit might suffer because there would be fewer trade candidates passing through to your filters. This will leave you with fewer trades to contribute to your overall profitability. You can increase this factor by adding more currency pairs to your portfolio or by adding trading hours to your schedule. When adding pairs, be aware of the correlation to the ones already in your portfolio.

IMPROVE YOUR TRADE MANAGEMENT RULES
Trade management relates to profiting from the trades you decide to enter. It aims at maximising your average winner while minimizing your average loser. The key is having rules that let winners run and exit losing trades without hesitation. Aim for realistic profit targets by reviewing the profit logic of your trades. Predefine a risk that you accept and don’t exceed. One of the ways you can do this, is by managing your trades in a multi-position manner, aiming for several profit targets. Take profit at various stages, as the market makes it available to you and roll your stop loss to break even or a profit protection point as the trade progresses.

DISCILPLINE AND CONSISTENCY
Once you have the right system, rules and filters in place, you just need to trade your plan consistently day in and day out. Monitor your susceptibility for making errors and eliminate them one by one. Relaxed, concentrated and mindful like a Zen Monk. Don’t overtrade by chasing entries. Don’t under-trade by arbitrarily skipping valid opportunities. Be organized and prepared. A random, inconsistent approach to trading leads to random, inconsistent results that will never be optimal. So plan your trade and trade your plan.

TYING IT ALL TOGETHER
Simply put, your expectancy per month is the opportunity factor multiplied by both the win rate and the average winner less the opportunity factor multiplied by both the lose rate and the average loser. For the example from my prior topic (see the link under Related Ideas), we know that the calculation was as follows: expectancy per month = 90 x 55% x €120,00 – 90 x 45% x €80,00 = €2.700,00. I have tried to give some tips and trick on how to influence each of the variables in this calculation with the aim to arrive at an improved mix, leading to an improved profitability.

Since the summer of 2013, I've maintained a bearish stance on the EURGBP cross as I correctly anticipated the central bank divergence theme (article in French : http://bit.ly/1AqJJ5G). Back in December, I indicated that this pair could reach £0.72 with a break of the 2012 lows. This target is almost reached, and I will be watching the euro for the first signs of a corrective bounce around £0.725/0.7200 in March. I am aware that even with such a correction, the fundamentals will remain quite bearish, especially given that markets seem to have started pricing back in a BOE rate hike in 2016 after the quarterly inflation report published back in February. Nevertheless, I can't help but notice the 1998 and 2003 highs (£0.7025-0.7240) that was a key resistance before December 2007. I'll be focusing on short-term price action within this zone in March, and any bullish reversals on the daily chart may represent long setups to target perhaps as far up as £0.755. That said, if the anticipated correction is overall week with more of a range that sets in, I might end up coming back to the short side given the long-term fundamentals. A monthly close below £0.70 would suggest even more downside potential all the way to £0.653 (2007 lows).

We are in a consolidation phase. Let the market decide which way to go and buy/sell the breakout.
Possible targets are on the chart. Atleast 33% profit within a month after breakout should be possible.

Are you ready ? : ]

Unless Bitcoin manages a lasting break above 300, the apex of the descending cone points to 40 by year end.

The band is becoming very narrow. to achieve this would mean a lowering in realised volatility which would mean an acceptation of the new price paradigm (a slow death in other words).

I like watching bitcoin only because for me it is a great case study of human behaviour (more than other indices that have macro forces affecting the price too).

I actually made this a while ago when I created Bitcoin Truevalue and haven't adjusted the current curve at all.

Basically, all the trading ranges can fit nicely into these curves and rarely escape out of them. I tried curving out the rest of the bull-run in years past but they didn't really fit the curves. I'm thinking it's a result of matured trading instead of just investing.

So I totally expect another touch of the top of the curve very soon, followed by a nice slow downtrend to continue the bear-run. Then we'll stop out at about $200 and then fly out of the bear resistance due to some good news I guess. Lower would be a nice bet but I wouldn't short after $200 and I guessing a lot of other smart traders wouldn't either. I'm betting the next moon won't be much at about $800 (not illustrated).

Please refer to the description in the analysis for information on this setup. Feel free to comment below for any questions or suggestions regarding my analysis.

Thanks
MaiTrader

Long EURUSD for bullish bat harmonic pattern

Long EURUSD 1.1130-40
SL 50pips
TP 1.1250

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