EURGBP Short at minor Double Top Retracment

FX:EURGBP   Euro / British Pound
704 12 15
0,618 Fib Retracment of latest High with RSI Divergence in 4 Hour Chart.

Short Pending Order at that 0,618 Fib would have been perfect, but this was my Entry:
Trade closed manually: closed 50% with small loss before FOMC News
Comment: closed remainig 50% also with some loss. too risky to hold it, closed almost every running trade and took profit. thanks for your support! good luck everyone!
The thing about divergences is that they can go on for a lot longer than anyone imagines. I would typically look at a whole host of other factors first. If there is divergence too then that would just be a bonus. I was long this pair and closed shy of 73 and I'd like to get long again.

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'.
+1 Reply
Thanks for your comment.
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 :-)
fash P_Parker
I like the fact that u have method behind your plan, u may be right/wrong about this trade but so long as your method is sound, u will get more right than u will wrong. If u are a novice trader, experience will help u sharpen you method over time. Personally I tried divergence trading and found it didn't work a great deal. I think Dan V (MOD) back-tested a divergence study at the beginning of the year and found the same. The thing is, price will diverge and then,like gravity, will have to retrace, but at what point? The 3rd divergence...or 4th...5th or 6th etc

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!

I see myself in a learning process. Since I started with Trading about 10 Months ago I tried different Strategies. Some of them you can see in my published Ideas. I trade still in Demo, but take that very serious! Only when I feel safe and Profits are consistent enough I will go live. You mentioned Experience, yes that is VERY important! I guess too many people start trading (Real) without all of that Experience, Strategy, Rules,... Stuff and burn their accounts. Sadly.... Trading View is so great to learn Trading, and I am happy to be a part of.
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 :-)
fash P_Parker
Hey P

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

Thanks for your kind words fash :-)
See comment to weekly EURGBP in your Idea.
Congratulations with your pick of the day!!

Similar view here, shorted at 0.7290 when the second top formed, partial profits taken a bit above that trendline, SL at BE!
Not sure if this structure is a leading diagonal or a running flat...

We'll see what happens, good luck!
+1 Reply
Very good Entry! Thanks
Almost another double top in the retracement...XD
Nice chart
+1 Reply
P_Parker MatteoLorenzi
Lets see how it develops :-)
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