EverythingForex

GBPUSD: Approaching Completion of 2 Bearish Patterns

FX_IDC:GBPUSD   POUND STERLING / US DOLLAR
Some time ago, I told that this pair was most likely going up in a 5-wave             wave (C) (see Related Ideas: "GBPUSD: Let's Try This AGAIN! Could Wave 2 Be Done Now?" and "ANALYSIS: GBPUSD             ; Has A Wave 3 of 3 Begun? Or Not Yet?"). That was 20 days ago that I posted that. I also posted a bearish bat pattern that you see in the chart above 19 days ago. Well now prices are almost there after wandering around in the desert for awhile.

There is also a larger bearish cypher pattern that completes almost right on top of the bearish bat . So you have 2 very high converting patterns converging at the same point just about. Will this cause some kind of reaction to the downside to occur? We'll need to wait and see watching the price action as those 2 patterns get filled. Long term, the wave (C) still has a long ways to go to the upside so I am VERY BULLISH on this pair and have been for weeks now.

DAILY CHART
snapshot

MY TRADE PLAN
I have been holding LONG positions on this pair for weeks! And I will continue to hold those LONGS. But when prices reach the 2 patterns and fill them, I may move to open some SHORT positions to take advantage of possible retracements.

*DISCLAIMER:
Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!

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how reliable is the shark and the cypher pattern that you trade? so recently some of my patterns failed. one was on usdjpy. is it due to the chinese market crash?
Reply
Cypher patterns are very relaible. Sharks are not so much but if used properly in conjunction with the 5-0 pattern to which a shark is part of, its' effectiveness increases. But know that patterns are not reliant on fundamentals. They are purely technical trading tools. As for the chinese market crash, being that I am more a technical trader than a fundamental one, I don't give much weight to the fundamental "reasons" for price moves. For example, on my post for the USDJPY, I called for the drop a month ago. Did I know anything about the chinese market crashing last week and this week a month ago? Of course not! But yet, here we are. My predictions were right on target! I'm NOT psychic! And no, it doesn't always work out so good. Just as in this pair. I talked about this pair going up also more than a month ago. Had nothing to do with whatever is happening fundamentally now. Yet, here we are. Prices have gone up just as I predicted. Well, with a lot of confusing signals along the way though.

I'm not bashing fundamentals of course. Being that I do have an economics background, I do pay attention to what is happening fundamentally, But I do not base my trades on the news reports. If there is a looming high impact fundamental news pending though, I will be more cautious in my trading. That's about the extent that I apply fundamentals. Remember, trading needs to be objective and mechanical as possible. Fundamental news reports are just too subjective in interpretation to be that useful. Case in point. The last NFP, the result was worse than expected which should've caused weakness in the dollar. Yet, when the numbers came out, the dollar rose. Go figure! If you went and read from the "experts" why, there were so many conflicting and differing reasons why that it made my head spin.
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