EverythingForex
Long

TRADE: GBPUSD: BUY@1.52522 Completed Bullish Deep Crab + Channel

FX:GBPUSD   British Pound/U.S. Dollar
This pair has been trading in a descending channel for the past few days and still has some more downside to go. But for now, there is a COMPLETED bullish deep crab pattern with it's PRZ down by the bottom of the channel. Within this trading channel, I have marked out its' ABCDE points and this crab is near the C point of the channel. Buying at 1.52522 would be in the PRZ of this crab and confluence with the bottom of the channel. Projecting that this point would only be Point C, the odds are good that prices will head back up into the top of the channel and form Point D and then descend back down again.

MY TRADE PLAN
I will take a LONG position ONLY if prices do get to the bottom of the channel whcih would be testing the PRZ of this deep crab .

*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 or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. 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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Fundamentally {Long term} GBP is bullish with a rate hike expected early to mid 2016.
If we hit any good news that BoE is looking at in order to raise rates then GBP will turn bullish very quickly.
With NFP taking place later this week and the way the dollar bulls have been i'd be very careful trading Gbp/Usd.
By trading GBP off USD you're really looking at a fight between both countries looking at a rate hike at some point.
Rather than do this, would it not be wiser to take GBP of a dovish currency ?
Any down that we see with GBP is going to be short term sentiment with current/daily news although we have to remember, most of the news that comes out is NOT what the bankers is looking at in order to raise rates, so therefore any down movement caused by these news pieces is short term.
The reason GU has took a fall of around 500 pips is simple caused by the recent inflation report and MPC minutes were less hawkish than anticipated by the market which caused a selloff in GBP.
Inflation is one of the economic numbers GB is looking at for a rate hike.

Reply
Killy_Mel JamesDixonTobots
a year ago
if it actually falls there - it will be on a risk of more downtrend - so be careful=)

snapshot
Reply
EverythingForex PRO JamesDixonTobots
a year ago
Of course. I don't really trade off fundamentals and am not trying to get into any fundamental vs technical arguments here. Although I do follow fundamentals and the news (as many of my readers can attest to), my trading is based on technicals. Long-term, I've been very bullish on this pair for months now. And still am. Just not right now. Right now, my charts are telling me that this pair is in a bearish rotation for the short term. But will again turn bullish soon.

As for the reason for the recent decline? There's too much contra-indicative fundamentals to be able to point to any one reason. And whatever reasons can be used to explain that fall, it didn't PREDICT it. Technicals, however, did indicate that there was a decline coming. But again, I'm not wanting to discuss that age-old argument. Thanks for the post and GL!
Reply
JamesDixonTobots EverythingForex
a year ago
I don't expect to argue about fundamentals Vs technical. lol
What i'm clearly trying to point out is that inside Keynesian economics which most the western countries are practicing, there is numbers/charts/maths/bar-graphs etc which shows every expect of the economy. example:
TE = Total expenditures} TE = C + I + G + Xn
Inside each of these we can go even deeper, such as .. C = C0 + MPC + x Yd.
So if a BoE say that they're looking for "induced income" which would be {MPC + Yd} Then we'd be looking for wages increase and if we got news stating we got that, then we go bullish.
BoE is looking for:
1/ Wage growth.
2/ Overall growth per quarter.
3/ Inflation coming close to 2%.
Their not looking for or at any other numbers/charts/maths/bar-graphs etc So therefore any other news is just pure sentiment for the day.
We just got hit with a poor inflation report which is one of the key numbers which BoE is looking closely at to raise rates. Poor data inside this report means that the economy is not as strong as they'd like.
As you said "There's too much contra-indicative fundamentals to be able to point to any one reason" And i think I've just cleared that up. Listen to what the bankers are looking at, such as the FED, they want???
Solid employment growth especially inside the labor market.
Tomorrow we get "The Initial Jobless Claims released by the US Department of Labor" It provides a measure of strength in the labor market followed up by NFP which will be the big one.
i trade technical as well bud, i feel thou that the fundamental side can give you a bigger longer term position with short term sentiment coming from minor news that others think will push the market down when really, they don't know how to use the fundamentals cause they think " There's too much contra-indicative fundamentals to be able to point to any one reason"
Good luck bud !!
Reply
EverythingForex PRO JamesDixonTobots
a year ago
Well, thanks for all that head-spinning stuff! Sure. It makes sense. But as we all know, "buy the rumour, sell the news". I don't. But all that means to me is that trading on news is not the most reliable way to trade. News does not give you any specific entry/exit points. Only speculation about what will happen. Besides. it\s not the news that moves the market. It's each trader's interpretation of the news and subsequent buy/sell actions that move the market. So back to the fact that it's human emotions that rule the market moves. Not the news. If everybody agreed on the interpretation of the news events, then there would be no volatility and the markets would only ever move in one direction. Then there would be no trading as trading requires opposing views so there will be buyers and sellers. So you see, fundamentals do not make things clear. The same can be said about technicals, I know. Each person perceives what his/her own mind sees. The "eye of the beholder" theory plays here as well. But trading is a zero-sum game. So in order for trading to exist, chaos must rule. Not order.

If you trade by fundamentals, then you must have more of a buy/sell and hold strategy and that requires some deep pockets. Frankly, I'm not willing to use up my trading capital on a holding strategy. That's not part of my trading plan. Sure. If it is part of your trading plan, by all means stick with it. Just not part of mine.

We can just agree to disagree about the value of fundamentals in trading. Believe me. I'm not against fundamentals in the sense that they do have some relevance. I have an economics background myself so I understand the value of fundamentals. But in trading, especially the way I trade, I don't use them in deciding about my trades. I watch them and follow them but only as a way of getting a sense of as you said, "a bigger longer term position". But even then, my own technical analysis prevails. In the longer term picture, as long as I've been trading (25+ years), my long term technical analysis has been more often right than wrong whereas fundamentals never gives that clear of a picture for me. But again, I don't trade on such long terms as I'm not a buy and hold/sell and hold trader.

GL to you as well. Let's leave this argument in the "you do it your way and I'll do it mine" category. It's not an argument worth fighting about. I'm highly, highly successful doing things my way and have been for a very long time so nothing is gonna change my mind. Thanks!
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