Thursday, December 17, 2009

GBPJPY—didn’t quite make it to resistance yesterday

The pair didn’t quite make it to the 147.50/90 resistance area yesterday (high was 146.94) before dropping sharply. However, the pair is coiling inside a symmetrical triangle on the three-hour chart so there are future opportunities for trading. Given the overall downtrend, I’d expect that this is a continuation triangle. As a result, the breakout, when it arrives, will be downward. However, as I’ve written before, pullbacks are common. In any case, it may also bounce off the upward sloping trend line of the triangle before breaking out. Examining price behavior at the time will offer more clues. However, my litany during this holiday season is to be careful when trading. Thin liquidity can result in rapid and exaggerated moves that can take out your stops and leave you reaching for spirits of an intoxicating kind.

Here’s the three-hour 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.

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