Cable Update (GBPUSD)

Sooo... Can you explain what you meant now?

in at 1.55596 long to 5690 will put on a trail if moving up at a good pace. go bulls

I agree, I'm shooting a little higher though

Initial entry @ 1.5387

Targeting @ 1.5760

Will jump ship if there is not a clean break at 1.5650

Going to be an interesting week for both the GBP and USD with announcements on Wednesday, on the backdrop of Greece too. Interesting article on Bloomberg over the weekend stating higher volatility in the past six weeks leading into these announcements, underlying fundamentals of poor productivity and PMI index report for June.

http://www.bloomberg.com/news/articl...l-bank-outlook

nice job holding,lost my nerve and TP at the peak friday from a earlier entry at 1.5450. cautiously reloading and i am watching the 5600 level close as well ,hoping to let the trailing stop do the work

I think GU will hold the support line and could rally towards 1.5600 soon.

Below is the gist of it, in images.

Changed the lowest red line for the 1 minute graph. Every time there is a technical blowout/bear trap/stop run in the market, as is the reaction from the demand zone at 1.5436 the market belies traders by giving short signals for 1-2 days. Combined with strong short signals in the news this is used to pull in the bears and then trap them while simultaneously trapping the breakout bulls in the order below:

1. No sellers are left in the area so price moves up
2. Short stops start getting triggered leading to more buyer strength(a short stops are buys, as you know)
3. Shorters who didn't have stops are lead to margin calls, a slower process because some people are trying to short pushing the price down slightly, but overall seller power runs out fast
4. I could be wrong about the distribution between stop loss and margin area, but as I said this is the gist of it, not a precise science
5. We reach a zone of institutional sells - in this case I was expecting it to be 1.564/5, but it was the 50% retracement of the 4H candle from the CPI news event from may - who start selling into the retail and "wrong-side" institutional bulls
6. Price starts moving in the "proper" direction

This is a real bear stop run, not the 2-minute runs people tend to think are stop runs. The same applies to bull stop runs except everything is reversed.

I have forward-tested the above with Forex Tester 2 and it has been true for decades because it just works so damn well since so few people learn it. Applying this takes thousands of hours of screen-time both on real accounts and test environments. Take care with this, it's a good tool but you shouldn't chase the market - don't try to chase a move while it's happening, you need to be in before the real stop run begins.

Now we'll see what the market has planned for us for this week. Honestly I don't see it going back to 1.56 or reaching 1.565 anymore, but you never know!

Edit: Also it's just 1 tool, it can not be used as a strategy in any way because you can't plan risk management with this knowledge and there are sometimes fake stop runs to catch fools like myself who think they know it all, as I did in the past

ok if 5513 lmt intact for 5625\54 can expect otherwise 5465 signal break for 5420\00. next BO can be 5233 & next 5088.. immediate targets up 5663 + 5699 are so nearer , should not miss test as early as possible . so 5513 is important for next immediate play now & all failure still at top areas after repeated tests probable.
take care .
fontu

Nicely said

Thanks for the detail. Quite interesting......

... Now we'll see what the market has planned for us for this week. Honestly I don't see it going back to 1.56 or reaching 1.565 anymore, but you never know! ...

I think you are right. H4 is showing both overt and hidden divergences

Still, 1 pump up is possible from 1.549/1.551 area. Also 1.5525/1.5535 is compressing down for now, but it could pump up from here too.

Bad place to trade. Good place to practice patience

There are some news events that can and probably will move the market - let's check on your statement late Friday

Thanks for the excellent detail,, alexpi,, 1 question though, i am a 1 year live trader,(1 year demo first) how does a person find out where the "instutional sell zone " is. if you dont mind

support now

You can only find out after it happens regretfully. As I said I was expecting it to be around 1.564/5 near the 21/22 May top, but it was a bit lower than that.

Usually they have their orders at key turning points and let price move freely in between for weeks or even months sometimes. You just need to bear in mind that when you look at the weekly you can easily see where prior orders have been executed and consecutively closed, then over time you can learn how they think as you observe.

For example the long limits that were determined on 4/5 May 2015 on the Daily were executed on 1 June, sell orders from 25 May were executed on 4 June, and finally the remaining long orders were executed on 5 June. Now we're just running on the energy created from them until we hit the next key point and those longs are closed, making room for new sell orders.

The thing is, since I know what you have in mind, you can't say for sure "oh it's gonna go down/up here" or "it's gonna break through here". Best thing to do is be patient and jump on when the decision has been made, after the market has turned (see 5 June above). It gets expensive trying to hunt for bottoms/tops/reversals, as a lot of people do (some people do this successfully). The best thing to do is to forward test the market from 2000 onward for example, paying attention to every 15/4H/Daily candle as if it's the normal market. You will get used to seeing the pattern over time, it's not rocket science

Just closed my shorts 35+ pips, and now wont be trading this week. Will take off and start next week due to too high risk and volatility this week.
Best of luck guys.

Hello

Thinking to trade back to 1.55220