David, could you please confirm that my approach of constructing bull/bear zone is valid.
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Certainly looks reasonable to me websmith.
I don’t personally use floor pivots, I prefer to use fibs with the MA’s, but I don’t see a problem with your zone.
Thank you, I just can not find fibs at dukascopy platform
Excellent update David,
So we look for PA testing the zone and also PA leaving the zone to determine direction and trade?
GBP/USD Daily Chart:
Here is something to make a note off and keep your eye on for the GBP.
I’m not sure we will see this level tested today, but at some point tomorrow or Monday if the bullish momentum sticks, then we could see a test of these resistance barriers.
I would fully expect to see large sellers within this resistance zone on the first time of asking. ( Corporates, large and small funds, CB’s ect ect)
As I said above… I would expect large sellers on the first time of asking if we can see at test of the MA’s and 50%.
I think this could be a large move.
Hello,
Yes thats right.
David
David,
re candle formation: these formations are different on different charts depending on price feed and platform time zone. My charts are GMT+2 which for instance gives me an engulfing while on another chart it could be tweezers. how do I deal with this or do I stick with what my chart gives me?
David would you look for divergence with a entry when using a railways track or engulfing entry of the 15min time frame, or do you take these without divergence. Or if no divergence look only for a 1-2-3 entry instead. As on attached chart price stayed within the zone, and gave a close railways track on 15min of this support low 15min entry but no divergence. Would you have waited here now for a 1-2-3 entry or taken at this entry.
Hi PAL1
You are best sticking with what you have in front of you… if the market is bullish then its bullish, your going to see the signs regardless of what time-zone your charts are on… one mans engulfing candle, is another mans tweezers as you said… just follow your signs
Hi joffie
You just go into the trade on the first sign that its holding…ie: if an engulfing prints you take it, if rail tracks print, then you take it, or if its a 1,2,3 then you take it, or if there is divergence then you take it.
These are all separate signals… its nice when you see 2 or 3 at the same time… but just one is needed… any one of them… also remember that entry’s are not limited to just those particular patterns. Thats just the patterns I prefer to see, but I will enter on others.
Really all your looking for is a reason to say to your self… right thats it, I’m taking this trade, as you were already expecting buyers here anyway. You just need to see that little bit of proof that they are there and its starting.
If your wrong, well, all you need to do is wait for the BBZone to break and hold as resistance, and take the short trade.
Right folks, thats just about time when I call it a day and go for a walk with my dogs.
London closing soon.
I will pop in later on to answer any questions that may be here while I’m away.
Catch you later.
David
Hi David,
When you enter based on a pattern on the 15 minute chart, are you entering at market or are you placing pending orders to take a break of the pattern? If the latter, how do you enter when you spot divergence?
Does the session you trade make any difference to your approach?
Nick
Where in FL do you live (from time to time I guess lol). I am in Jacksonville you should stop in for a beer sometime. Good stuff and glad to have you hear
thanks David for response to my q re the indicators.
also great anecdote re QIA/RBS, one q…how did you know the ccy transaction was done @ 8am on 9th jul? i guess you know people on the RBS desk? anymore similar stories feel free to digress a little from the chart specific chat, its good to see exactly how the institutional desks operate & theres not much of this reading material about. this is a great post by a fx spot trader hope you dont mind me posting…
A Day in the Life of a FX Spot Desk Trader (Part 1)
he should write a book.
many thanks for your time.
Thank you David. I have been looking for this kind of information for a long time.
Hi,
I enter at market as I’m watching it all the time during the day. Its mostly candle patterns I use for entry timing and the 1,2,3 pattern. These are all separate signals.
Divergence on the other hand is best anticipated rather than waiting for it to fully form. This is actually easier than it sounds, as you pretty much know when its forming and can then time entry… the key part is making sure that if you do anticipate divergence then you do it at a support or resistance level/zone, and not in fresh air (random place on chart)
Here is an example 15 minute chart…
Price is printing lower lows, while the stochastic is printing higher lows.
But look at the red vertical line I have drawn from point 2 down to point B.
You can see the stochastic has not yet turned up to fully form the higher swing low… based on the candle and because its at support, you can anticipate this to be divergence forming and therefore take entry.
The second low thats partially formed at point B is a fair distance away from the prior stochastic low, while price is defiantly making lower lows… this is why you can anticipate the divergence, but also remember, you would be doing this at a point were you expect there to be buyers, so your not just taking a gamble here… you have theory behind the anticipation of the move.
Palm Beach, bought a house there when I went through a golf phase. Only been to it 4 times since I bought it. Spend most of my time in in Spain and the UK.
Many thanks David, I had a great day today following you, God bless you!!!
Hi,
The transaction was reported from some contacts I have as it went through. The announcement wasn’t made public on news wires, blogs, forums ect ect, 2 hours later. Thats why GBP started trending UP later on when joe-public heard about it.
This happens everyday BidDiddler, there was nothing unique or out of the ordinary about this… this is how the currency market works… exports/imports change currency every hour everyday… buyouts, sellouts change currency everyday, again currency has to be exchanged. Its just a normal day in the currency market.