Thursday, January 21, 2010

GBPJPY—enough of the triangle already

When last we looked, the Guppie was languishing inside its triangle. As I write, it has poked its little toe just below the bottom edge and is saying:

a) Hell no, I won’t go
b) Ooh, is that water cold or what?
c) It’s not that far a swim to 1.4596 (the December lows and a mere 146 pips.)

I shorted at 147.55 and have already moved my stop to breakeven and taken partial profits at +70 pips (the quickness the drop does not bode well for this pair). It has broken below its trend line (the bottom of the triangle). RSI has broken below its trend line as well. As I wrote the other day, the price objective from the confirmed double top is still unmet. The width of the triangle can also serve as a price objective. Before too much merriment commences however it needs a solid close below the long lower shadow of the just completed three-hour candle. A bounce would probably take it back to the mid-point of the triangle. We’re just going to have to wait and see what unfolds.

Here’s the three-hour 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.

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