Friday, January 22, 2010

GBPCHF—intransigence gives way, maybe

I’ve been watching this pair all week, thinking it’s time to short, it’s time to short. GBPCHF has remained intransigent in essence by my quite logical chart analysis. Finally, it looks as though the pair may be budging a bit. I shorted yesterday at 1.6897. It went a little underwater and then just sat there like a lump. I thought about closing it before I logged off last night but the house money effect kicked in (I’ve had great profits this week and figured I could afford the loss). This is not a good way to think and reflects the general fatigue I always feel as the week winds down. Regardless, the pair has finally started down but remember it had a paltry 139-pip drop earlier in the week before it rebounded.

Should she decide to continue her drop then the lovely, potential double top (it’s not a double top until price confirms it by going below the lowest point between the two tops) suggests a move to 1.5624. Groundskeeper, open the gates and let the wild dogs run (to paraphrase the Boss)! But as he goes on to sing in that song, “none of this has happened yet.” (Livin’ in the Future on the Magic CD). There’s a strong daily uptrend line coming in at 1.6374 and 1.6325 is the trough line of the potential double top. (12/16/08 at 1.7026; 1/20 at 1.7037; low point between was 1.6325). Those price points are far more likely and I, for one, will be happy if the pair goes anywhere near there. As I wrote yesterday, this is nothing but a range trade, pure and simple.

Here’s the daily chart:

© Dianne Fecteau, 2010. 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.

No comments:

Post a Comment