Trades # 1 and #2 were based on statistical probability and price action and trade #3 was based on retracement off of the NFP news. My thoughts for the GbpUsd at the start of the week was to trade with the trend up after a bounce off of the weekly 38 fib. Was not looking for it to retrace to the 50 fib which it did. Trade #1 was over anxious based on bounce of the 38 fib did get out with plus 10 pips. No real PA to confirm the trade so it did not merit much in pips. Even though it dropped 214 pips I did not see anything that merited a good trade to the bottom side. Others may have but sticking to what I felt comfortable with I never saw anything after Trade #1 until it bounced off of the 50 fib. There I picked up 69 pips exiting after it had a daily RM of 150 pips and begin to retrace. Knowing that it had Exceeded it's yearly DAR of 120 pips and the last 55 days 73% statistical probabily RM of 120 pips. In short 120 pips was max that I was comfortable with
(see http://www.forexfactory.com/showthre...=27624&page=39. and posts 572 and 579) This trade I could watch during the day so I was able to exit the way I did . The entry point could have been safer I post that latter but enough said on one post. The news trade was good for 47 pips.
On the daily so far it has retraced to the 61.8 fib of the present days high and low. A break above that and past opening price of 2.0413 could be up side. Break below the daily low and 2.0355 Fridays 61.8 daily fib retracement down side trend continue. Max target on the down side would be Friday's low of 2.0302 which would be 120 pip (RM) on the daily.
I'm new to this forum and it's such a wonderful forum for both new and experienced traders.
I'd love to show my chart why I think GBPUSD is on its way up but am afraid I don't quite know how to attach a chart with this post. Looks to me like its a given that GBPUSD will definitely rise above its previous high but the opportunity to buy is yet to come.
One thing to note from last post. The gbpusd in 2006 had retraced to the 61.8 fib 38 times for a 73% probability. This year it has retraced to that level 24 times for a 62% probability. The rest of the fib levels are with in a few percentages when comparing 2006 and 2007. See link and post 542 for additional information on weekly fib retracement for various years. http://www.forexfactory.com/showthre...=27624&page=37
High probability trades are based on 70% probability and up. When looking at the daily RM the 55 days it has ranged at least 120 pips 40 times for a 73% probability. When looking at the year 120 pips RM is at 46% probability. From the charts the GbpUsd daily RM has been at the yearly DAR of 120 pips. Over the course of the year 90 pips is at 69% probability. Last week it had a RM of
95, 134 ,112,113, and 120. Based on that the first day of the week has a high probability of trading below 100 pips, plus the first day of the week tends to have a low RM any way. Wednesday has the highest average RM for the year.
From last Friday's bullish daily bar/candle it has only retraced to the 38.2 daily fib of the days high and low.Possible bounce off of these fibs and up. Always keeping in mind PA and the daily RM probabilities and WAR.