GBPUSD

GBPUSD
So after yesterday’s successful trade, how will I approach GBPUSD today?

Equity futures were bidding up early and now that the US equity markets have opened, the Dow and S&P are slightly up. This usually does not bode well for the oft-maligned USD. Looking at my three-hour point and figure chart (P&F), I see that there is still a bit of room for GBPUSD to rise if it ranges within the area I’ve highlighted. I’ve pasted a picture of that chart below the candle one. The pair is in a downtrend on the shorter time frames. The three-hour candle chart has interesting features. First, the pair didn’t quite achieve a minor resistance level. It could rise to the blue lines that I’ve marked as a strong resistance zone but it hasn’t happened yet. Second, the candles have upper shadows. These are more apparent on a one-hour chart (not shown). Third, it has broken a steep, short-term uptrend line. This is not a big deal because it could be dropping down a bit to catch its breath before it pushes up. But it isn’t showing great strength as represented by RSI or candle size. The candles aren’t tall like the first one that pushed off yesterday’s morning’s bottom. Finally, it could be forming a Gartley pattern that, if it develops, will be bearish. I sold which is marked by the little triangle. I’ve already moved my stop to break even. We’ll have to see what unfolds. In any case, here are both the three-hour candle chart and the three-hour P&F chart:

© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.