Wednesday, January 20, 2010

GBPJPY—Evening star

Although GBPJPY is still within the triangle, in fact about the same place it was yesterday morning after dropping and then rising again, an evening star has formed on the 15-minute chart. An evening star is a three-candle formation that begins with a long bullish candle, then a star, and then a candle that closes well into the bullish candle. I’m not thrilled by the tall bullish candle before the start of the formation but it is what it is. I’m willing to risk a small position given the reasons I cited yesterday—overall downtrend, price objective still unmet from double top, strengthening yen, and resistance levels. The safer trade is still to wait until it closes outside the triangle.

Support is at 148.29, 148.00, and 147.47 (the triangle bottom). Resistance is at 149.00, 149.48, 149.79 (triangle top) and 150.72.

Here’s the 15-minute 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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