Jack's Log of GBP/USD Trading

Hi all. I'm Jack, not really but I like the handle, from Canada.

My thread is dedicated to GBP/USD. I will be posting my trades along with trade ideas that I have for myself and the rationale behind them. The purpose, both to keep a log of my trading and to also hear your opinions on my analysis.

My style of trading is purely technical, however, I still keep up with major economic news. I trade along side the DJIA and USD Index to strengthen my bias both short term and long term.

A bit about me... I am 22, still in school and trade as a hobby for now. I am trading a small amount in a micro in hopes of acquiring some discipline now before I can start an FX account as a long term investment with more capital. Hey, maybe I can take this small amount a long way? Wouldn't that be sweet.

My trading set up:

21, 55 and 200 EMAs
Slow Stoch (5,3,3)
MACD
Pivot Points
Visual Supports/Resistance
Trendlines

I trade anytime during the day from 7AM until 2AM EST.

Expect to see DJIA, USD Index and of course, charts of the GBP/USD.

Happy Trading!

Here I have two weekly charts, one of the USD index and one of the DJIA. As of recent we have seen USD strongly correlated inversely with the direction of the DJIA and for the most part a linear correlation with the USD index. This is the case for GBP/USD whereas EUR/USD is even more so correlated if you relate its price action to the DJIA and the USD index.

Both charts are showing a hanging man pattern. The DJIA hanging man occurred right at a rising trendline and both charts are showing a 1-2-3 pattern (both indicate a possible reversal). Because this I state my case for USD weakness for the week. A bounce up in the DJIA and a fall in the USD index is obviously a high possibility based on these charts alone.

From this I have built my trading plan for the week. See next for this along with my chart.

The first chart is a 4H GBP/USD showing you that price is currently at a major resistance level (long gray rectangle). The smaller rectangle was a level previously broken this past week. The second chart is the 15M chart.

These are the two possibilities I am looking for. Remember I made the case for USD weakness however I am never keen on buying right at resistance and given the fact that this pair is not as tightly correlated with the DJIA/USD index as the EURO, I have both a long and short trade plan. Plus this week is a big one fundamentally.

I will go LONG on a break and retest above the long grey rectangle around the 1.4530 area with a target of 1.4650 (120 pips). My stop will be about 5 pips below the most recent M15 swing low.

I will go SHORT on a M15 1-2-3 pattern out of the current level if, and only if, price breaks and retests the minor trendline I have drawn with a target of 1.4345. Stop again 5 pips beyond the most recent M15 swing high.

I prefer closing my trades manually however if I have to be away from the computer I chase the positions with a trailing stop.

The 1-2-3 pattern I was looking for unfolded while I was out watching the football game! See my chart .. 1-2-3 plus break of the trendline, wave 3 was a 50% retracement of 1-2 and as planned my target would have been hit at 1.4345 (Was hit on my platform)! Missed a nice 100+ pips to see my cardinals lose. Tough life eh.

I won't be up to take this trade if it were to play out in my favor but this would be my next play. A break of the larger trendline I have drawn (can be seen above in a previous chart). I would enter on a fib after a break of the hourly 21-EMA (blue) and target S1 at 1.4272 .. Potential could be at least 90 pips maybe upwards of 100+ .. Just an idea for anyone trading euro session tonight


This chart is an hourly btw.

It started to move before I went to bed so i had to watch ... In at 1.43724 .. new target at 1.41800 (+192.4 pips) .. stop at 1.43524 (+20 pips)

Hit my trailing stop overnight for a +110 at 1.42624. Original target would have been hit.

With an OB stochastic (daily and hourly charts) and an M15 200EMA, and houlry 21/55 EMAs resisting topside ALONG WITH a 50% fib of the most recent down swing, I notice a very nice shorting opportunity. You can verify all these resistances I mention on your charts but I post 15 minute chart.

Currently, price is trapped between the 200 (topside) and 21/55 EMAs (just below current price). My trade plan is a break of the minor rising trendline and re-test forming a 1-2-3, where wave 3 comes to at least the 38.2 fib of wave 1-2 (ideally 50%), at which point I will SHORT in accordance with the overall trend.

My targets will be 1.4050 and 1.3915 ... This lies under S3 for the day so if I am around the computer I will see how price reacts to S3. I will post when I enter the trade with specifics.

Further notes, if S3 begins to hold we will form a descending triangle (hopefully) thus making a break and re-test of S3 another good short opportunity.

Forget the trendline ... Looking for a 1-2-3 off the 50% fib and 15 minute 200 EMA to get in .. 15 minute 200 EMA is providing nice resistance and 5 minute 21 EMA, 1 minute 200 ema, support. Watch for a jolt in one direction, ideally down. Good luck.

Ok I am short at 1.4245 and 1.4230 .. Target is 1.4103 (+ 142 and 127) and stops are right at wave 3 at 1.4257 for both... Daily stochastic has just moved out of O/B territory as well and with plenty of topside resistance I feel this may be another winner..

Topside is still safe for now. Stopped out for -32.5 and -17.8 pips. Stuck in a range bounded topside by the M15 200-EMA and supported by the H4 55-EMA. Looking to short still.