Deviation/Variability

To help out some newbies, in forex its a little like hunting, you have wait for deviations from the mean, the more deviation from the mean, the greater opportunity for a technical failure about to occur, some would argue to hop on the deviation from the mean and to ride the deviation, but this is extremely risky 80%-90% of the time. If a deviation from the mean occurs and it breaks through resistance wait for another resistance level to be tested, usually only 1-2 fail, but very rarely a third unless its a news driven event.

This could be applied to any time frame your trading. Another word for deviation from the mean would be called a 'spike'. Most of the time the spikes thrash around 10-20 pips on the intraday chart in a quiet market. If more then 2 resistance levels the danger zone occurs, where fading a deviation from the mean is extremely risky and the market trends for the rest of the session spilling over into the next.

Good post,
In a ranging market deviation is well defined
Your variables are very easily confirmed in price action during a given session or over a series of sessions.

Applied to your "hunting" metaphor...I would say "there is no where to hide"...
And applied to mathematical graph theory deviation is nothing more than "luck" in the equation.I would concur that riding the deviation may workout just fine, but it's "uber" risky.

Basically, to all newer folks into fx what I'm saying here is the trend is a very good friend it may look like it's failing you...but all in all it's just taking a detour from point A to B to C to D to E and so on...

For further consideration
gbp capitulation spike this week than failure....

The rubberband of usd bullishness can only be stretched so far, artificial support of the usd by institutions larger then the average player by a factor 10,000 can swing markets contrary to prescient trend.

This rubberband can only be stretched so far, before it snaps by the weight of the overall market against these large institutions, similar to when the bank of england was assualted with barbarians at the gate.

I say swing and swing, I will ride you to the breaking point, and when it breaks I will ride you down. The war on terror and escalation as more market participants are brought into the mix, with the next one being Iran, Irans deadline lumes, ultimately these dominoes were set in play to annihilate Irans nuclear capability. A radical muslim nuclear bomb is not what the western forces want to allow. With the drug of market forces and capitalism injected into the veins of our enemies, like Russia and China, these enemies have succumbed. The only real threat on the world stage is 'them' its either us or them mentality. This will and can only end when the administration changes. An Iranian Oil Embargo is very likely when all this plays out, till then Oil will trend down to market news of a slowing economy, as will gold. The culmination of USD strength will be when Iran is brought into the mix. And when Irans oil weapon is used, emerging markets and equity markets will be hit and utterly demolished. Exit out of your equity holdings. Buy long term puts options. Then Oil and Gold will sky rocket with the USD, bonds will rally as equities slide. A forced slowing of the world economies will occur, as this materializes. Don't catch falling knives till it all plays out. Stagflation is unavoidable. To preserve the value of the dollar, as commodities peak. The Fed will be caught in a bind to raise rates to fight inflation. USD/JPY will strengthen and continue to strengthen testing levels higher than 120 before its all over. As zirp is phazed out, the japanese central banks weapon will be a cheap currency to stimulate its economy. GBP/JPY relative strength is an indication of this. These two pairs are the only predictable ones. GBP/USD and EUR/USD strength will be tested as usd/jpy is pushed higher. When the war is declared over thats when USD strength will subside.

A little bit of our future envisioned in a trance state using java. lol. Take it for what you will.

The immediate future?, USD/JPY strength overall, but counter trends to kill the position holders, lots of volatility.

Your geopolitical factors/views and variables are understood by the market as risk. Strategic call's in VIX for this particular timeframe should be looked at.

Your using the wrong "tense" in as far as fx is concerned. There is no profitting in "will" there is only profitting in "now"....LOL
BoJ has began it's export based economic strengthening "program" as evident in the past week or so with the catching of most bigger sell orders.

Mr.Paulson's strong USD is more than a just narrative, vested interests abroad are exactly that, nothing more nothing less than usd...lol
Java and crystal balls aside fx targets will be met...lol...tsunami's will be rid'in and market short-sightedness will be much exploited.
Have a nice weekend
I remain