The destiny of the euro over the next weeks and months
We have had signs from the gbp/usd this morning that it is going to go down. We entered earlier on a confirmation signal but it was stopped out. It seems that the market only likes confirming clear bullish/bearish engulfing signals or dark cloud cover / piercing patterns. This is what I am waiting for on gbp/usd, after which i will wait for price to confirm with a specific type of retrace (according to my system rules) and then enter for what will hopefully turn out to be a pipful trend! 
If you recall, yesterday our downtrend did not reach its target - it had what I have termed an āinverted signal line reactionā (ISLR) which led to the trend concluding abruptly. What also happened was that numerous trader entered long at this āabrupt exitā signal, which sent price sky high. There was, however, not a single entryļ»æ long yesterday - so the market was solely reacting to this ISLR.
Just the same way in which the market is a fractal creature, it also loves to repeat itself. Please take a look at the following screenshot of the 4hr pound chart.
Can you see how the previous 4hr candle had an identical reaction to that of yesterdays 1hr candle? The only difference is that on the 4hr chart price pierced this line 3 times ļ»æbeforeļ»æ giving the ISLR. Will this make all the difference? The answer is: I donāt know, but i ļ»ædonāt think so.
Considering the pound is due for a short already based on the 1 hr chart technical picture, my money is on a repeat of yesterday scenario: this next 4hr candle will close ļ»æaboveļ»æ the signal line (which is at price level 1.5810), then price will dive downwards. I strongly feel we still need a decent signal+confirmation to fulfill the requirements of the 1 hr technical short, but it we get them this hour, then from 12pm gmt will be the time from which the drop will commence.
Of course, I could be totally wrong - but something tells me I am not going to be 
Happy PIPS!
PFXP
what is and how looks a "dark cloud cover / piercing patterns "
can you post pls a screenshot??
regards,
as
astock - please use google to search for ācandlestick patternsā. Wikipedia do a good article on the subject. Infact, these patterns are so crucial to good trading that you might want to consider Steve Nisonās book on the subject: The Candlestick Course (green book). I found this book very useful.
Kind regards,
M
If you look at the equity markets you will understand why your short didnāt work out. We were never in a bearish trend. We just had a little retrace. Price will go up most likely.
letās wait & see!
Which trade are you refering to?
In my. Humble opinion, GU will rally 1.59 , test it and maybe continue to 1.61 following good european news abt greece making euro stronger against usd and this affects gbp usd, as you might already know
Dam i was wrong, germany to declare greeces bankrupcy 
THERE HAS BEEN AN ISLR (INVERTED SIGNAL LINE REACTION) ENTRY ON THE DAILY CHART ON EUR/USD!!
Posted on 19/02/2012
Building on the subject of ISLR entries from last week ā of which we had 2 (one on the hourly chart and one on the 4hr chart), I analysed the daily charts for recent daily price action and I found that we had had an ISLR on the EUR/USD on the daily chart.
Please take a look at this chart:
The reaction came on the 3rd February, the daily close above the ISLR came on the 7th February, and then this led into an hourly trend exit on the 9th February with entry based on 15 minute PA* confirmation. See below:
The entry had a 20 pips stop and has potential for over 420pips to target.
This also explains the lack of 1hr and 4hr entries recently (we have only had a single 1hr short entry sub-trend).
In short, ISLR entries are powerful trades that always lead to resolution through to target. I will be on the lookout for these based on all timeframes 1 hour and above from now on.
Best of luck with your trading this week.
Michael
- PA = Price Action
M system has just produced a short signal on the eur/usd at 10:00GMT at price level 1.3221 with sl 1.3249 and initial target 1.3082
ouchā¦
Reactions on euro and pound
the euro
the pound
nb. The low of the 1700 gmt candle potentially also created an islr scenario ā so price may still close below here before shooting higher. However, consider the fact that there have already been 2 islrās on the pound it may choose to ignore this last one and move up without it.
These comments are more for observational purposes rather than to trade ā we try to limit our entries to the london session whenever possible.
Pfxp
CRUCIAL INFO take from skype room: guys just before i go some important analysis results: please do not wnter any longs on either pair on your own - the bearish trend is very strong and it is showing now in both pairs. REMEMBER the targets I have given you and from tomorrow we will only be looking to enter short on trend entries on 1hr / 4hr / 1 day timeframes. Looks incredibly likely that prices are going to plummet towards their respective targets. Markets have been very unpredicatable recently but I believe now this is the true overall direction we will be seeing the market move on these two pairs over the rest of this week, possibly into next. So remember - if you are trading on your own focus on shorts, NOT longs at this stage.
Iād like to know why do you think we are in a short trend?
True DJ-30 is reaching all time high but doubt it will crash, at least not in the near few months. E/U already took a deep sink because of the economic situation in Europe (so did the equity markets). The higher the TF you go, the more fundamental analysis works and technical has little weight. Price may go to about the 1.3000 level but highly doubt it will go past it if it even reaches it. The E/U likes to stay around the 1.3500-1.4500 in healthy situations. Unless you forsee a disaster I donāt think we are in a long term short trend.
I agree weāre in a downtrend both pairs at least on the 1H chart which is my method of trading.
Mike you are clearly good at technical analysis but maybe taking a break from the drains of the Skype room and really getting back to your best maybe the best thing because this is one hell of a bad run dude.
Wishing you all the best
We are in a short trend on both pairs as both have given us daily short signals, GU on 20th February and EU on 9th Feb.
Both are in transit towards their relative TPās which are 1.5610 and 1.8880 respectively.
Kind regards,
Prosperityfxpro
Hi friend (what is your name?),
Thank you for your comment - and it most certainly demonstrates that you have the best intentions in mind.
I wish to reiterate a comment I made today in my chatroom. In summary: My system is extremely sound, losses are due to human error (in this case MY error, which was predisposed by me having to take significant time out of monitoring the markets a fortnight ago due to a nasty bug and missing some very fundamental technicals), and (the MOST important part I might add) I strongly feel I/WE are back on track now.
We are in bearish trends on both pairs and although we missed the initial daily shorts we are trading individual short sub-trends as they happen on both the euro and pound.
If the skype room were ever to bear too heavily on my focus on the market I will certainly make sure that I take some time out from it in order to focus on what we are really here: trading profitably and learning.
One last thingā¦ my philospohy is that THERE ARE NO MISTAKES, ONLY FEEDBACK. If it were not for the fact that I made every mistake possible in the last 3 years I am certain I would not have the knowledge that I have now and we would not be on this journey together. I hope you are able to appreciate the significance of what I have just said, and above all else, my wish is to show you not in words, but in actions - in other words, net pips!
Wishing you the very best successes in trading the fx market!!
From one trader to another,
Prosperityfxpro