From a fundamental perspective, the BoE look further away from hiking and the ECB are standing pat for the time being, the divergence in monetary policy expectations have narrowed thus EUR/GBP has consequently risen and I reckon this could head to 78.
Technically it is a little oversold and there is a bearish wedge/pennant forming in what I think is an early uptrend. It could go down, I hope it does for both our sake's (I'd like to get long again) but I would urge caution here. There will be stops above 73, they could be taken prior to FED and if the FED don't hike tonight I could see EUR/GBP rising from a massive EUR/USD short covering.
Then there is the FXCM 'pick'. I am naturally suspicious of any broker 'picks'...they do this to encourage traders to make trades (increasing their commission) and perhaps they are long (as I'd like to be) and trading against some of their clients.
Having said this I wish u success in this trade and congrats for the broker 'pick'.
Sure, divergence is not the only part. But having that 4 hour Divergence with 3 Tops one higher than the other at the 0,618 Fib gives me Reason to go Short. I can be right or wrong. I share my Ideas to learn for myself when getting comments and help others (like I learn from others).
I trade only technicals and cannot comment your fundamental view.
I watch closely at my open Trades and decide what to do befor the FED News comming out.
Hm, mybe you are right with what you said about the FXCM "pick". From my View I see it as a Possibility for a novice Trader to get more Attention and Critic on my Trades. That helps me to become better!
I wish you also good Luck :-)
I agree with your point about technicals but I feel it useful to have a basic grasp of the fundamentals. I won't pretend to know most of what is going on behind currency movements but understanding the basic themes is a good weapon to have. In day-trading it is not so important but in the bigger picture, monetary policy is key and provides us with trends and the ability to hold on for larger profits. Having that basic knowledge will give u more conviction in your trading, especially when the technicals validate it.
Anyway, P Parker, my 3 year old says hello. He loves Spiderman!
Maybe Divergenc isnt yours, thats fine, there are hundrets of other things that maybe work ;-)
What I try is catching the 3rd Divergence Wave/Bounce with a 50% or 61,8% Retracment of the last Wave. The last Times it worked pretty good :-)
And very important it has to be at a Retracment Level and within the structure/Trend. Not just only somewhere in the chart....
Like that in my USDJPY Trade:
Yeah with the Fundamentals you are right, but at the moment I concetrate on the technicals and take care when important news are released. not the content matters, but the fact that the market shows heavy reaction to it and leads to a higher risk for your trades. maybe later i look for the fundamentals :-)
thanks anyway for your comments on my trading even when you disagree ;-)
greetings to your young hero :-)
I didn't necessarily disagree with your EUR/GBP trade, I noticed u closed it out, I think u should have stuck with it, it still has potential to come down (I posted my own EUR/GBP chart following our conversation whilst waiting for the FED). I was just saying that it looks bullish to me but I have been known to be wrong and anyway, nothing goes up in a straight line. And I reckon u learn more from losses than u do from wins. I'm just a little skeptical about focusing on divergence but if u find something that works for u, fantastic. Do it a hundred times and perfect it. That is all u need, one system that has a better than average chance of success. That is success. Over time the experience gained will tell u when to take the trade and when to leave it.
They say it takes 4/5 years to make a trader. I now understand why that is. It is nothing to do with how long it takes to learn the theories, terminology etc. It is how long it takes to see everything the market has to throw at u...to learn from it and to remember it and then to profit from it. I am glad u are demo trading first
I deliberately did not reveal my entry targets on EUR/GBP, I like to watch and feel the market but 72-7220 looks like a good place to enter at the moment. 70.80 though is my preferred target although I doubt we will get there now. Chart below