Cable Update (GBPUSD)

Excellent post Pat. And if I may expand on the point you make quoted above, - in a nutshell it's about finding a repeating pattern (s,) and seeing how often an outcome results from the pattern (s,) over a representative sample (s,) that when allied to optimised risk and trade management rules, results in a net gain over the whole sample re that outcome, and thus a potential trading edge. All you gotta do then is develop the psychology to actually trade it profitably.

I've made a few good trades but then lost again as I thought it was going to continue. I have a 3ms latency to the exchange, and even I'm having to check if my connection has been lost.

Great posts you two...

I once looked over 3 years of NFP data, looking for a correlation between the news release and the subsequent market movement. If the news was positive for the dollar, did the dollar go up or down, and vice versa. Half the time the dollar went up, the other half time it went down. Very little correlation.

Likewise, I also have looked at simple statistics on the number of bearish and bullish candles, both as individual candles and statistics on consecutive bullish and bearish candles.

For individual candles, and all timeframes, the law of large numbers applies. That is, there are approximately 50/50 number of bullish and bearish candles. Showing that it's essentially a coin toss which the next is going to be. Although on some time frames (8HR is an example I clearly remember), the split was about 52/48 bullish to bearish, despite GU's general long term decline. So basically that means that there were few bearish candles, but those candles were slightly larger than the bullish ones.

For consecutive candles, the greater the number of consecutive candles there are, the lower the probability of that number occurring, but also the uncertainty of that probability increased, because there are fewer and fewer examples in the dataset as the number of consecutive candles increase.

...re the discussion above and Pat's mention of 'confirmation bias.' Yes it is always a danger, but operating with an edge you have to worry about it less as it's the sample that matters, not individual instances. Also, it doesn't usually kick-in after one instance. Yes after one instance you have a 100% probability of a given outcome, but as we've said - the sample is too small to see if an edge is present, and so it is no wonder that the market, instead of delivering for you, a nice 'gift' - that gift turns out to be a steaming great turd when you open it. If you don't get an edge, you are always just operating blind/guessing based on who knows what, and the market will likely curl one up on your desk more often than you would like/can stand.

Thank you so much for sharing this.
This is an incredibly valuable comment because you've moved beyond theory and actually put the data to the test.

You've perfectly illustrated the core principles I was trying to get at.

1. On the NFP Correlation (or lack thereof):
Your finding that it's essentially a 50/50 coin toss is a classic example of the 'Buy the Rumor, Sell the News' phenomenon in action.
The market often prices in the expectation before the release, making the actual event a volatility trigger that has no predictable direction.
It confirms that trading pure news outcomes, without a deeper understanding of market positioning, is a flawed strategy.

2. On the Candle Statistics: This is brilliant!!!
The fact that individual candles are close to a 50/50 split across most timeframes is a powerful reminder that the market is fundamentally efficient in the very short term.
It's essentially random noise.
Your observation about the 8H chart on a declining GU pair is a masterclass in nuance—it shows that the trend isn't defined by the number of up vs. down candles, but by the average size and momentum of those candles.
The bears were winning not by fighting more battles, but by winning bigger ones.

You've hit the nail on the head with your final point about consecutive candles.
As the streak lengthens, the sample size shrinks, making any statistical 'edge' unreliable.
This is why mean reversion strategies (betting a streak will end) can be so dangerous without careful risk management.

Thanks again for adding such high-quality, data-backed insights to the discussion.
This is exactly the kind of conversation that helps newbie like me to learn.

Thank You

Mr T's FSTE DIVI trade has produced 100% win rate over a year by many different traders, but still I'm wary when I trade, that's when your money management comes in to play

I think we might be related/reincarnated siblings or something

My god...This range.

Which I think is about to run into a falling knife.

small loss

small win

big win


trading without a plan = Big loss

hopefully then you can buy it for 150pips

Not making higher high, I think there is more room to go down

Hello Guys,
if i were you i will wait fo rthe Drop 13300 might not be bad idea to buy.
tomorrow who knows what news will bring but i would like to see 1.3300 to buy.
pound even Euro is in range.
other then YEn doing som correction looks like we are at stale mate.
big players are out.
too much chaos,
UK Russia.
chona US traade war, and china is not backing down.
then US GVOT SHUT DOWN if continued
then FED will be forced to cut the Rate and maybe that is TRUMP's game.
after that hopefully things will cool down.
but if rate is going down.
EUR and Pound might not be a bad currency to buy Better then CHF and CAD
YEN is out of question it could move up or down 100-200 points
and FINALLY.

GOLD demand is high.
but again 4200 is not the level where i will want ot buy GOLD.
and the correction we saw today 15M 50$ down then back going up.
i will not be trading gold.

i am just explaining that when i am confused and dont see the whole picture,
for me its fun time.
but i have limit order for Pound even Eurusd also.
tomorrow it may get hig if not then Friday is not usually a day i like to trade.

its like a puzzle right now we are trying to solve.
and nothing seems good enough to put my toe in the trading pool.
only pair i see is CAD
GBPCAD EURCAD is above average price.
so if were to trade tomorrow i will wait for 1.8810-20 gbpcad to sell.
same goes for eurcad. need 50 pips high to be comfortable to sell.

those are just our analysis.
i hope that helps.

Good luck you guys.
Trade Wisely.

remember if you dont trade you cannot loose.
and try to get this day trading out of your mind.
day trader doesnt means you have to trade every day.
just that most of the time we close our positions of atleast half the trade in profit and let the other half run ONLY IF PAIR is doing well.


so Good Day to you all.
wish you all the best.

just my 2 cents.

If one is definite as a shoe, in that the left won't fit right comfortably, nightmares will always haunt your trading experience.
Our clarity is blurred by so many factors and discerning them is a mind-numbing.

Bull is intact, but buying in this area is a bit risky,
Bear is trying to force it down, but the momentum low.

if i see a 4hr close above 1.33700 i will consider buying for now watching on how far sellers can get involved.

Triangle redrawn. This is not a sell at any rate. Waiting for any lucky dips to buy again.

Target hit

3370 is my 4hr equilibrium and a close above it is the supply of the said timeframe, so a pullback into the demand area could be a fair ground for a buy.
The 1hr equilibrium is adjusting accordingly from 3310-3324 to protect bull structure @ 3333.
The structure is awkwardly defined for lack of a better word, hence a good level for a buy.
3413 is 161.8 expansion as minimum TP of the breakout mitigation I mentioned in my earlier post

Triggered.