EUR/GBP Trading Room

TL test as per chart

TL broken.

Anyone noticed with how much fidelity the EURGBP keeps within a range of Daily Pivot levels?

I have been trading live for about a year now with different strategies over different pairs. I will make no claims that I am yet a super profitable trader. However, during my research of my most recent strategy which I tried applying to various pairs I happened to apply the Daily Pivot indicator to charts to time exits. As I looked back through the history of the EURGBP with just the Pivots I saw something interesting. It visibly "bounced" quite often. I began to backtest with this hypothesis for the statistical accuracy.

I also read about the EURGBP to learn as much as I could; ultimately leading me to this thread. EURGBP is of course a cross pair of two strong highly related currencies. Geography dictates that the economies of Great Britain and the EU are linked and dependent. Thus the EURGBP tends to trade within a range. Occasionally a specific event will drive one or the other in a direction and it will crash through support and resistance. Still, it looks for some limit of the move before retracing back.

Intraday trading from what I can see (myself trading in EST) follows the same slopes and directions of equity markets. You can correlate the path of EURGBP during the US trading day to US stocks. I attribute this to the slight dominance of the Euro and its association with risk sentiment in the market.

Studying this pair fascinates me and I've stopped trading all others to devote to its mastery... or at least as much as one can master anything in forex. Here is my strategy:

 

1. Apply Daily, Weekly, and Monthly Pivots on appropriate TF to find likely support and resistance levels.
2. Draw and update dynamic support, resistance, and trendlines to confirm entries and exits.
3. Set trades with Order-Cancel-Order Entries for the range before bed. The best times to trade are when Frankfurt and London are open. Also keeping myself away from the screen makes me a better psychological trader and probably why I've been successful
4. SL 20 pips with Trailing SL of 10.
5. Lately added RSI to better time exits than letting TSL hit.
6. One trade per day.
7. Risk for now is real but minimum (10,000 lot) to ensure I make responsible and consequence driven decisions. Later I will go with 2% of capital.

This strategy requires applying trading finesse with knowledge of chart patterns, trends, and SR. Here is what I look at:

http://s1.postimage.org/jfw9dsjty/EURGBP_D1.png

I watch the D1 for reference to the bigger picture and also to chart Monthly Pivots. These Pivots are not tradeable in themselves but give a good idea as to the tendency of the pair and danger zones. For instance; I will not be taking any longs over 0.8789 unless it is a SOLID break.

http://s1.postimage.org/fwb5fnq08/EURGBP_m30.png

My main trade window is the M30. Here I trade, draw my lines, and make my notes. Price does not always agree with the Pivot lines *exactly.* Some leeway is required around them using other levels and/or intuition. This has been my best week yet. It is amazing how much the pair has gravitated around its Weekly Pivot too.

 

1. 10.9 Short: Taken late Friday; After this one I've opted not to trade late day US session as there is not enough momentum to make a very good risk/reward on most trades.
2. 64.3 Short: I placed my entry right at the 9/21 high of 0.8794 which fit nicely between the DR1 and MR1. Was a very confident and profitable setup.
3. 10/18 no trade: No confirming SR levels around the S1 so I did not trade and missed, oh well. Rather lose an opportunity than lose capital.
4. 61.1 Short: Entry between MR1 and SR1 proved near perfect again. Like the earlier trade during the week I closed this one earlier than I should have ergo I added the RSI to make me wait.
5. 10/20 no trade: Entry missed by 0.3 pips! Also did not take second trade because of my one trade per day rule (I missed the day's move) and no trading late US.

Traders love to brag about their success but rarely talk about their failures. I'll break that cycle and show you last week:
http://s1.postimage.org/ccrsby2z7/EU...10_7_10_13.png

Two losing trades and three break evens. Almost enough to make someone abandon a strategy! Some of these were due to me not following rules. But proper SL and risk keeps me in the market. The week prior I was +100 pips and had I let one bad week dissuade me then I'd missed this week's +120!

Overall this pair is my new favorite and I'm exclusively trading it. I plan to keep this thread updated as Forex Factory has the best community and I'm looking forward to reading other traders' takes on this unique pair!

It's amazing how fast you have discovered relations, which took me almost three years to comprehend. A small excuse for me is the fact that opposite to you EURGPB is not the pair I trade exclusively. On the contrary I take it as a convenient complement to EURUSD and GBPUSD that I mainly trade.

Patterns, that's what traders train their brain to see on these crazy charts!

I have traded those pairs (and just about every other) over the past year. I find that there is so much more fundamental influence in those currencies than cross pairs where technical can rule. I make myself aware of EU and GB news events to know if I should stay out of the market.

Hope someone else took a long @ 0.8684. Wasn't a perfect entry but its up and SL to BE already.

does anyone trade this pair ?

Yep... just not today as it's not moving far out of its range.

This pair always scares me....its sudden and unreasonable moves made me lose lots of pips in the past...and as a result of this i cannot make healthy decisions about it...today i had a BUY order...and i just closed it with a small profit without reaching even the 1/5 of my target....and when i saw that almost noone posts on this thread then i confirmed my fear once more )

here is my view of the pair...and as i said i closed the orders....

Selym,

I think you are failing to note the month-long resistance at 0.8789 in your analysis which was the September Monthly Pivot, October R1, and has been tested 8 times on the Daily since 9/15. That might skew your targets and risk/reward. I am an intraday trader of EURGBP but long term I am bearish for its current ranget. I would look for near term support at 0.8657 then at 0.8530.

What a boring week so far . EURGBP has stayed rangebound. Staying short through early US trading until 0.8674. Longer term I am still waiting for a test of 0.8657.

http://s6.postimage.org/624dbm435/EURGBP_10_26_2011.png

Last week was boring up until Thursday's big Euro move. Lost on that move but my trailing stop made it only half my SL. Ended week +43 pips.
http://s6.postimage.org/8m6foycs1/EU...0_23_29_11.png

This week saw of course the bulls get eaten and the Euro lose. Who didn't see that one coming? If there is one thing I've learned from holding long term positions is to get out when you are amazed at how far up you are!

Lost -10 pips on a Long from the S1 Monday. I'm realizing that my strategy is definitely a rangebound one; it does not like major market moves unless it just so happens to have bounced off a S/R before making said move.

Yesterday grabbed +30 pips on a bounce just above the S1 that I took manually out of fear (bad) but worked out in my favor.

Today Short from 0.8630. Here's to a good rest of the week!

I posted Wednesday all upbeat about the trade I was in that turned into a loss; but a trailed one so I can't complain. All one with my sort of plan can do is look at the pair's behavior that day with scorn bouncing bullishly up and down on the R1! Likewise Thursday was another of those days when the pair just didn't want to behave! Breakeven; can't complain.

But TGIF! Near perfect entry between the daily R1 and monthly Pivot which seems to be serving as good near term resistance following the Euro volatility of the past two weeks. Ended the week up +68.6 pips.
http://s6.postimage.org/515yrziup/EU...30_11_4_11.png

So onto more long term forecasting. I was bearish and made a lucky prediction in that regard. I am far too brazen to understand the wisdom and patience of the long term but I am cognizant of it. The month of November is starting to take shape...

Everyone's eyes are on Greece for their political decision and in the future wonder how Italy will be handled next and if Germany will peace out on all of them. In the meantime the GBP cannot gain much ground as economic news points to stagnation in Great Britain. What does this mean for a direction of the pair? Nothing! What does this mean for me as a rangebound trader? Everything!

In the near term we are definitely in a tight range between 0.8658 and 0.8530; waiting for something to happen one way or another. I really see the pair giving us some resistance through the second and third week as if they were dates. If we could somehow score I seriously doubt breaking 0.8786. I'm going to look for support at 0.8530 but if it breaks there should be some interesting battles to 0.8485.
http://s6.postimage.org/sgnvxc2lt/EURGBP_D1_11_4.png

I think that a couple will fall to 8420

Bad week for the Euro. Not many good trading opportunities with my strategy either. Battles at the S1 gave me breakeven trades on Monday and Tuesday and a -10 pip loss today.

All the news out of Eurozone is grim; Greece deadlocked and Italy is now in focus. Spain will be the next to take media attention once either of these countries comes to a resolution and leaves the spotlight. Keeping my bear sentiment and we are now down inside the "Fight Club" range for the EURGBP. After this week I'll have to evaluate how low can the Euro go! If I was a fundamental trader I'd be watching for a smart retracement to the upside before shorting the EURUSD for the longer term.

Let me take a moment here to comment on Berlusconi. What an alpha male he is; unrepentant womanizer by night and capable media mogul and politician by day. At his peak of masculinity well into his 70s he unabashedly wades through scandals involving numerous beautiful women and faces down his critics demanding his resignation with a simple "Ok, sure, I'll step down... in a minute." Not only does it display his resolve to 1) stay in power and 2) use his clout to solve the countries problems as only he believes he can but it also bides him time to regroup his coalition for future attempt to save his seat. He does all this without flinching his persistent shit-eating grin. Love the guy.
http://s6.postimage.org/5ok18uypd/ar...44_233x392.jpg

On the sterling side the BoE is expected to maintain benchmark rates and asset purchases. Following the increase in asset purchases last month both CPI and GDP have shown slight increases so I do not find a basis to warrant any change.

I am putting less emphasis on the Monthly S1 0.8485 level and taking an entry between it and the Daily S1 for Thursday of 0.8471. I really think hitting this level will make the pair so oversold that we'll get a pullback off that region. The next level of support takes us back to February at 0.8460.

Thursday setup:
OCOs:
Entry Short @ 0.8534 SL: 20 TSL: 10
Entry Long @ 0.8458 SL: 20 TSL: 10

Haven't posted in a few days because I got my last post so WRONG on so many levels (my trade that day and Berlusconi actually leaving power).

But... with rumors he may make another run this week, 2 full losses, followed by a Wednesday to give me a break-even week... I've not yet abandoned the strategy.

However, I'm frankly scared by the charts tonight. I began to notice a bearish pennant which in all my months of trading I've never seen this ranging pair do so clearly. I have a bad feeling about it and what it means for the Euro tomorrow and into next week.

http://s6.postimage.org/v752tdnsh/EU...11_17_2011.png

More importantly my gut says keep out of the market with my strategy which is not designed for this kind of occurrence. However, on paper, I'm looking at a short with a SL 0.8605 and TP 0.8462.

any thoughts?

tp hit at 0.85906... i love work pips, come home and they are in the bank.

Analyse Long
I'm waiting a retest for a long entry

Enter Long at 0.83654

Exit long and take profit at 0.83808.