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GBP/USD Higher timeframe Analysis

  • #41
  • Jan 11, 2008 5:19am Jan 11, 2008 5:19am
You trade down into support, and you trade up from support..

you trade up into resistance, and you trade down from resistance....

Quarterly support 1.9504

price travels from the middle outwards, and rotates back inwards...

price didn't complete the Thursday lows from the 5-day 50% level Sell-down yesterday, so it completed it today into Friday lows....I was selling the 90 pip top on Friday for the move down and exit.

Didn't trade longs because I had to go out to dinner, but if I was around I would have bought the lows today.....

Next Week starts a new weekly timeframe, and we repeat the process:- trade UP and Down from channel extremes along with using the 5-day 50% level..

Have a good Weekend
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  • #42
  • Jan 11, 2008 6:33am Jan 11, 2008 6:33am
Frank,
Great job this week, I look forward to next week trying to understand the market and your method.
So, bias is upward the first couple days, probably 9660 area, correct?
take care
  • #43
  • Jan 11, 2008 7:14am Jan 11, 2008 7:14am
Thank you for the last update, Frank. Your method has certainly opened up some excellent possibilities to tie in with my own methods/strats.

Looking forward to seeing if the next news reverses the rotation back 90 pips towards intraday support...may already be underway as i type.
  • #44
  • Jan 14, 2008 2:48am Jan 14, 2008 2:48am
GBP has pushed up early on Monday and trading around the 5-day 50% level...

with 90 pip completion and spiral top...the Risk level is set for Monday @ 1.9647

Risk trading against either side of that level....
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  • #45
  • Jan 14, 2008 3:50am Jan 14, 2008 3:50am
Quoting Frank D
GBP has pushed up early on Monday and trading around the 5-day 50% level...

with 90 pip completion and spiral top...the Risk level is set for Monday @ 1.9647

Risk trading against either side of that level....
Frank, am i along the right lines?

Prevailing monthly trend = SHORT

Weekly pattern = 2-3 day rotation long towards 5-day 50% level

Price has made it to the 5-day 50% level, so we check the 3-day range (high), to see if it is above or below. If above, then strong possibility of a resumption of the downtrend, if around the same level then 'bottom to top' week (counter trend) more likely.

I have 3-day range high at 1.9764 on the 9th, as this is higher than the 5-day 50% level, the expectation is that the down trend will resume ie a 'top to bottom' week.
  • #46
  • Jan 14, 2008 4:18am Jan 14, 2008 4:18am
Monthly Downtrend is Down, but it's hitting monthly reversal zones @ 1.9504...if it breaks this level then it's down further 1.9332

when it opens in the middle of the 5-day range it can go either way, back towards the 3-day highs or back down to the channel lows....

Keep in mind that Sunday is part of the daily timeframe so it has to be included seperate. don't let anyone tell you otherwise, if you subscribe to TIME and Price....

Therefore your 3-day high is 1.9664 (breakout) into Tuesday...

when using 90 pip bars you define Risk by the spiral points:- tops and bottoms, if it coming down from a 90 pip high you concentrate on shorting with the expectation of going down....

once you partial exit around 31-43 points you run stops just outside the range and hold, so if you are stopped out, you've lost the bare minimum or made a small profit....

if it takes off you know you are wrong, but it allows you as a trader to see that a breakout could be a possibilty and trading longs would be ideal using the same strategy...

However, a breakout of the range and you hold into the next range into Tuesday...

Whereas 'shorting' you are only trading down into Support and exitting the trade...ideally using 90 pip ranges as reward....
  • #47
  • Jan 14, 2008 4:23am Jan 14, 2008 4:23am
Thanks Frank...pieces fitting together better now.
  • #48
  • Jan 14, 2008 4:39am Jan 14, 2008 4:39am
Quoting Frank D
...your 3-day high is 1.9664 (breakout) into Tuesday...
...i'm assuming 9664 is a typo and it should read 9764 as current 3-day high.
  • #49
  • Jan 14, 2008 4:42am Jan 14, 2008 4:42am
Here is a tip.....for day-trading 90 pip ranges...


you've entered the trade around the 90 pip spiral point... either high or low

and it's moving into your direction, so you are into the money...

a good trade should continue into the 90 pip range completion without reversing 32 pips....

if it reverses 32 pips without completing the 90 pip range, there is a good chance that price will move into a consolidating pattern, and or go and retest the reversal point once again...

Sometimes it's a good idea to lighten up when this happens....

I know GBP can move quickly at times, but I know once it reverses 32 pips, i'm going to be hanging around for awhile ( a few hours) before anything happens:- completes the 90 pip range or moves into the next 90 pip range against my position..

it puts my trade at risk when though i'm still in the money...
  • #50
  • Jan 14, 2008 4:45am Jan 14, 2008 4:45am
3-days

SUNDAY, FRIDAY, THURSDAY...

what's the high on Thursday:- I've got 1.96645

As long as it remains below this, the Overall trend is down.....
  • #51
  • Jan 14, 2008 4:52am Jan 14, 2008 4:52am
Thanks, 9673 on my platform. Thanks for the clarification.
  • #52
  • Jan 14, 2008 8:10am Jan 14, 2008 8:10am
...90 pips short now complete from the 1.9647 high....where to now...down to monthly reversal zone at 504 perhaps.
  • #53
  • Jan 14, 2008 1:02pm Jan 14, 2008 1:02pm
GBP is following the Trend down:- This week’s trend target is 1.94020, with further weakness down into 1.93320 during January…

On Monday, the focus was use the 90 pip spiral top and trade down, once it completes the 90 pip bottom @ 1.95575, it could move into a 90 pip rotation pattern (swing back upwards) or it will hopefully continue down on Tuesday towards the lows following the overall trend…

This analysis is valid unless price breaks above the past 3-day highs on Tuesday.

As I’ve mentioned before I don’t know how long people hold their trades for, but if you are in it for more than a day trade, the strategy remains:- partial exit on or just before the 90 pip completion and hold with stops above today’s highs, and then it’s up to traders to take out any open positions whenever they like, and whatever timeframe level they like, as shown in the chart below…..
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  • #54
  • Jan 14, 2008 7:33pm Jan 14, 2008 7:33pm
Expectation that yesterday's sell-off will hopefully continue down into the higher timeframe levels.....(Tuesday lows)

However, Tuesday isn't a 'sell' day, it actually has a Bias to rise upwards....

Personally I wouldn't go looking for 'short' trading on Tuesday if it's rising upwards....

Personally I can't go long either because it's not rising upwards from support.....

So i'll sit it out and run a trailing stop on open short position @ 1.9610, and not trade on Tuesday....
  • #55
  • Jan 14, 2008 10:46pm Jan 14, 2008 10:46pm
frank 5 day 50% is here without sunday 1.9626 may be cable will touch arround that resistance and last 3days 50% level support is arround 9500

so is this good time for short when cable will arround 9620 arround and then watch the game for arround target 90 pips short position what u think?
  • #56
  • Jan 14, 2008 10:56pm Jan 14, 2008 10:56pm
Since my earlier report, GBP has been rising upwards (lower Circle), and this was forewarned by the rises in tomorrow's ranges (higher lows).....

Tuesday has a random length:- but there are certain levels, that traders should not be trading against:- above 5-day 50% level and don't short heading towards 3-day highs and certainly don't short above 1.9639 (breakout)

1.9369 is still viewed as a valid resistance zone in the overall downtrend, but a break of this high and the view is the market is heading back towards Weekly 50% level +

Therefore to answer your question, which i've already answered:- trading shorts today is higher risk than normal....so if you want to short, then limit lot sizes.... I won't be shorting..

please don't ask me what you should be doing:- read the analysis and look at the levels and work it out.
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  • #57
  • Jan 15, 2008 6:40am Jan 15, 2008 6:40am
GBP has followed the statistical UP day on Tuesday forwarned by the 'rise' in Wednesday's low....

Price breakout and heading towards the Weekly 50% level, and expectation that it will move towards Wednesday highs tomorrow...
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  • #58
  • Jan 15, 2008 1:45pm Jan 15, 2008 1:45pm
GBP has continued up into the Weekly 50% level and stalled.

Often this level is a resistance level and the market continues down into the Higher timeframe support levels. However, one of these support levels has already been reached.

When we look at the Weekly timeframe, we want to be trading in the direction of the Weekly close:- Will the timeframe close higher or lower away from it's opening price? In this case price is moving upwards away from it's open, and in theory price can move into higher prices by Friday...

If this is going to be a weekly timeframe that closes higher, then support is around the breakout and 5-day 50% level, it will often support price the next day and head towards Wednesday's high...

If the Weekly 50% level is going to be resistance, then price will often still rise towards Wednesday's highs first, but reverse back down into the 5-day 50% level and close on it's lows around this level....

Day-Traders have two levels to use to minimise Risk on Wednesday...

Position traders or swing traders, would have partial exit around the Weekly 50% level on the'breakout' but remain in the trade and filter the weekly trend with the 5-day 50% level for the rest of the week....
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  • #59
  • Jan 15, 2008 1:51pm Jan 15, 2008 1:51pm
Quoting Frank D
GBP has continued up into the Weekly 50% level and stalled.

Often this level is a resistance level and the market continues down into the Higher timeframe support levels. However, one of these support levels has already been reached.

When we look at the Weekly timeframe, we want to be trading in the direction of the Weekly close:- Will the timeframe close higher or lower away from it's opening price? In this case price is moving upwards away from it's open, and in theory price can move into higher prices by Friday...

If this is going to be a weekly timeframe that closes higher, then support is around the breakout and 5-day 50% level, it will often support price the next day and head towards Wednesday's high...

If the Weekly 50% level is going to be resistance, then price will often still rise towards Wednesday's highs first, but reverse back down into the 5-day 50% level and close on it's lows around this level....

Day-Traders have two levels to use to minimise Risk on Wednesday...

Position traders or swing traders, would have partial exit around the Weekly 50% level on the'breakout' but remain in the trade and filter the weekly trend with the 5-day 50% level for the rest of the week....

Frank of all the "systems" I have read on this board, your's seem the most pragmatic. It's basically what i try to do, but without the experience and methodology I just eyeball it. Very interesting stuff!! Thanks!
  • #60
  • Jan 15, 2008 6:17pm Jan 15, 2008 6:17pm
The Weekly direction was going to be defined by Wednesday's trading, the 5-day 50% level and the breakout of 1.9639..

Tuesday's late sell down has given us a fair indication of where GBP is probably heading....

A failure of the Weekly 50% level, and move baack under the break, and now trading below the 5-day 50% level the only conclusion is that price is heading down into Wednesday's lows, and probably continue down into much lower levels this week...

Wednesday's trend is defined by the 5-day 50% level....

I'd be surprised to see price move back above Tuesday's breakout on Wednesday... if it does the expectation is that it's going back to re-test Wednesday's high....(less probability)

Traders should use above levels to minimise Risk...

It's Wednesday, the middle of the Week, and it's trading in the middle of the 5-day range:- each way bet
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