From Preparation to Execution: My Journey in Forex Trading

[Jag757]

Hello fellow traders,

I’m excited to start this thread and share my journey in the world of Forex trading. With 20 years of experience in the markets, I’ve gathered a wealth of knowledge and insights, particularly around trading strategies involving support and resistance levels and breakout patterns.

In this thread, I’ll be sharing my nightly analyses, charts, and reflections. My goal is to provide valuable insights that can help other traders while also learning from this community’s diverse perspectives and strategies.

Initially, I will concentrate on the GBP/USD and EUR/USD pairs, as they are among the most liquid and commonly traded. However, the principles and strategies I discuss are generally applicable across various currency pairs, so feel free to adapt them to your trading.

I’m here to offer my experiences and observations but also to learn and grow as a trader. Whether you’re a seasoned professional or just starting, I believe we all have something to teach and learn from one another. Your thoughts, feedback, and contributions are highly encouraged and welcomed.

Looking forward to engaging discussions and mutual learning!

Best regards,

J

[Jag757]

Taking a look at last night into this morning on the GBP/USD. This was one point of entry, I know there were some who got into this trade a little earlier. I waited to break what I considered the strongest support and picked up a solid 14 pips.

Conclusion

The correct analysis focuses on the break of the 1.2840ish level as the significant support level during the current trading day. This break provided a clear entry point for short positions, with confirmation from supporting technical indicators. It’s crucial to always use precise information and verify all data, especially in a trading context, to ensure accurate and reliable analysis.

BTW: The EUR/USD made almost the same move so I won’t analyze it for now.

[Jag757]

This is a messy chart and what I use for analysis. I like to take my trades on a clean chart and then refer to this one. So here is an idea of where we could be heading if we break our current support on the EUR/USD.

Analysis: EUR/USD 4-Hour Chart

Current Price and Support Levels:

• Current Price: The EUR/USD is around 1.0804, indicating that the price is testing a crucial support area.

• Key Support Level: The major support level at this point is around 1.0800, which is both a psychological level and a technical support area. This level has been tested and held in the past, making it significant for traders.

Potential Downward Targets:

1. Immediate Support:

• 1.0780: A minor support level slightly below the current price. If 1.0800 fails to hold, this is the next level to watch.

2. Stronger Support Zone:

• 1.0750 - 1.0730: This range includes previous lows and could act as a stronger support area. A break below 1.0800 could see the price moving towards this zone, where more significant buying interest might emerge.

3. Extended Downside Target:

• 1.0700: A key psychological and technical level. Breaking below this could signal a deeper bearish move, possibly attracting more sellers.

Indicators and Risk Management:

• MACD and RSI: Continued monitoring of these indicators is crucial. A MACD histogram expanding into negative territory and RSI moving further into oversold regions would confirm the bearish trend, although oversold conditions could also hint at a potential rebound.

• ATR: Increased ATR indicates higher volatility, suggesting that if the support at 1.0800 breaks, we could see a rapid move to the next support levels.

Conclusion:

If the EUR/USD breaks the 1.0800 support, the next immediate targets would be 1.0780 and then the 1.0750 - 1.0730 zone. Proper risk management, including setting appropriate stop-loss levels and monitoring for potential rebounds, is essential in these scenarios. I appreciate your patience, and I will ensure to provide more accurate and reliable information in the future.

[baemax023]

Thanks for sharing your trading journey with us! Looking forward to learning from your posts.

[ria_rose]

Welcoooome! 20 years is definitely no joke so I’m sure you’ve got lots o great stuff to share! I just wonder. In your 20 years o trading, how long did it take you to become consistently profitable?

[Jag757]

Thanks for the question. I think I was profitable within the first year. That is not to say, that I could live off the income I was making at that time. My goal then and still is today, is to be able to trade my own money and make a bigger return than I could in traditional investments. I have achieved that goal.

[Jag757]

You are very welcome and I hope everyone gets something from my analysis and share their thoughts as well.

[ria_rose]

Wow. That’s great to hear! I’m not as lucky, and I’ve been here or like 3 years! HAHA. A lot of other newbies also struggle with that. How did you do it?

[Jag757]

Follow me here and I will show you how I set up and what my potential trades will be. I will post some analytics as many nights as I can and it gives a potential trade in both directions. Really, it’s just finding a method and then using proper risk to reward. Actually, it’s not that easy but with time and repetition, you can develop a pretty good strategy.

[Jag757]

Here is some things to look at on the GBP/USD. I am looking hard at the 4 hour chart for guidance but added the 15 minute for a complete view. If we break low, we could pick up a nice gain before we hit support again. Beware of false breakouts. Unless you have strong volume and momentum, then I would wait and let them retest the area of breakout. You may miss a few like this but you are less likely to get fooled. Good trading. Please use this as research and do your own before making a trade!

GBP/USD Analysis with Market Context

Current Chart Analysis

1. 4-Hour Chart

• Price Position: The price is currently around 1.2835, consolidating after a downward move.

• Trend Line Support: The price is sitting near a diagonal trend line, around 1.2815, which has served as support.

• Resistance Levels: Key resistance levels are at 1.2880 and 1.2900, with the price below the 21 and 50-period MAs, indicating bearish pressure.

• Indicators:

• RSI: Near 50, suggesting neutral momentum with a slight bullish inclination.

• MACD: Shows potential for a bullish crossover, indicating possible short-term upward movement.

2. 1-Hour Chart

• Consolidation: The pair is consolidating around 1.2830, close to the trend line support.

• Resistance and Support: Immediate resistance remains at 1.2880 and 1.2900, with support at the trend line around 1.2815.

• Indicators:

• RSI: Recovering from oversold levels, indicating potential for recovery.

• MACD: Suggests a possible bullish crossover.

3. 15-Minute Chart

• Short-Term Levels: Shows finer price action with support and resistance in line with higher time frames.

• Indicators: Align with the broader view, suggesting potential for a short-term bullish move if resistance levels are breached.

Upcoming Economic Events and Market Impact

1. Key Events on July 31, 2024:

• Euro Area Inflation Rate (CPI): This release can impact EUR pairs, indirectly affecting GBP/USD due to its strong correlation with EUR/USD.

• German Unemployment Change: A significant indicator for the Eurozone’s largest economy, potentially impacting EUR pairs.

• US ADP Employment Change: A precursor to the NFP report, this can set the tone for USD pairs.

• FOMC Meeting: Any unexpected announcements can lead to volatility in USD pairs, including GBP/USD .

Strategic Considerations

• Potential Bullish Scenario: If GBP/USD can break above 1.2880, supported by positive UK or neutral US data, it might head towards 1.2900 or higher.

• Potential Bearish Scenario: A break below 1.2815, especially if accompanied by strong US economic data, could lead to further declines towards 1.2770 or lower.

• External Factors: Keep an eye on broader market sentiment, geopolitical events, and any unexpected news that could affect market volatility.

This analysis combines technical chart insights with upcoming economic events, providing a well-rounded view of potential market movements. Always consider a comprehensive approach, including risk management, when planning trades.

[Jag757]

I am not going to do an analysis on the EUR/USD tonight because it is almost the same as the GBP/USD.

[Jag757]

Theis chart shows a classic technical pattern formation known as a descending triangle or a wedge, characterized by lower highs converging towards a flat support level. Here’s a breakdown of what this pattern typically indicates and some considerations: We are still in the summer range even though we have had a few breakouts here and there.

Pattern Analysis:

1. Descending Triangle/Wedge:

• The pattern consists of a flat support level, which has been tested multiple times, and a descending resistance line formed by a series of lower highs. This suggests that sellers are becoming increasingly aggressive, pushing the price lower at each peak, while buyers are maintaining a steady level of support.

2. Support and Resistance:

• The flat support level, around 1.2800, has proven strong, as the price has rebounded from this area multiple times. However, each bounce is met with lower highs, indicating weakening buying power.

• The descending resistance line connects the lower highs, marking the level at which sellers are consistently stepping in.

3. Indicators:

• ATR (Average True Range): This measures volatility. A decreasing ATR could indicate a tightening range, often preceding a breakout.

• RSI (Relative Strength Index): Currently around 50, suggesting a neutral market sentiment but potentially setting up for a breakout signal depending on its movement.

• MACD (Moving Average Convergence Divergence): May provide additional insights into momentum shifts. A crossover below the zero line would confirm bearish momentum, while a crossover above might suggest bullish potential.

Potential Outcomes:

1. Bearish Breakdown:

• If the price breaks below the support level at 1.2800, it could signal a continuation of the downtrend, with potential targets at lower support levels. Given the pattern and lower highs, this outcome might be more likely, especially if accompanied by increased volume.

2. Bullish Reversal:

• Alternatively, a break above the descending trend line could indicate a reversal, particularly if the price closes above this line with strong volume and the RSI moves into bullish territory. This could lead to a re-test of previous resistance levels.

Strategic Considerations:

• Entry and Exit Points:

• Short Position: Consider entering on a break below the 1.2800 support with a stop loss above the most recent high. Target could be set at the next significant support level below.

• Long Position: A break above the descending trend line with confirmation could be an entry signal, with a target set near the next resistance level and a stop loss below the recent low.

• Volume and Confirmation:

• Always seek confirmation through increased volume and other indicators (like RSI and MACD) to validate the breakout. Low volume breakouts are prone to failure.

This setup suggests that the market is at a critical juncture, with both bearish and bullish scenarios possible. Monitoring upcoming economic events and broader market sentiment will also be crucial in anticipating and reacting to potential breakout scenarios.

[Jag757]

We could be in a breakout area right now. A break of the 15 minute trend line would also be a break of the 4 hour trend line and that would be significant since it’s held for multiple days.Right now that trend line is holding. It could be a news event that moves it. I would not attempt to trade that but would wait till after the market settles.

15-Minute Chart Analysis:

1. Consolidation Range:

• The price has been oscillating within a defined range, with the recent high and low serving as boundaries. This suggests that the market has not yet committed to a clear direction.

2. No Clear Breakout:

• The price movement within the range does not constitute a breakout, as it remains confined within the highs and lows established previously. The moves up and down are likely testing the boundaries of this consolidation zone.

3. Indicators:

• RSI (Relative Strength Index): The RSI fluctuates around the mid-range, indicating a lack of strong momentum in either direction.

• MACD (Moving Average Convergence Divergence): The MACD also reflects a lack of strong momentum, with relatively flat histogram bars and MACD line movements.

Context with the 4-Hour Chart:

1. Larger Trend Context:

• On the 4-hour chart, the broader trend still shows a series of lower highs, suggesting an overall bearish trend. However, the recent price action indicates a potential base forming around the recent lows, suggesting possible support.

2. Support and Resistance Levels:

• The 4-hour chart also highlights a significant support area around 1.2800, which has been tested multiple times. The resistance area around 1.2855 to 1.2860 remains a key level that the price has struggled to break above convincingly.

3. Wedge/Descending Triangle:

• The consolidation on the 15-minute chart fits into the broader descending triangle or wedge pattern visible on the 4-hour chart. The convergence of the descending trendline and the horizontal support level suggests that the market may be gearing up for a significant move, but it remains unclear in which direction.

Summary and Implications:

• Current Market State:

• Both the 15-minute and 4-hour charts show a market in a state of indecision, with prices bouncing between established support and resistance levels. This is characteristic of a consolidation phase.

• Potential Scenarios:

• Bullish Scenario: A breakout above the resistance levels around 1.2855 to 1.2860, especially on increased volume and momentum, could signal a move higher. The next key levels to watch would be previous highs around 1.2885 to 1.2900.

• Bearish Scenario: A break below the established support level around 1.2800 could confirm the continuation of the bearish trend, with potential downside targets at lower support levels.

• Trading Strategy:

• Given the current consolidation, it may be prudent to wait for a clear breakout in either direction before committing to a trade. This approach minimizes the risk of getting caught in false breakouts and allows for better risk management.

[Jag757]

A quick look at the EUR/USD 15 minute chart. I was watching trades and this move out of consolidation suckered a lot of people who went long without clear confirmation and with major US news coming soon. Patience is key!

[Jag757]

Moving forward into the day. The Fed chairman is due to speak today and most likely something will be said that affects Forex trading.

Today’s Federal Reserve meeting is closely watched, with the market expecting no change in the overnight rate of 5.25 - 5.50%. Fed Chair Jerome Powell’s comments will be pivotal, particularly concerning future rate cuts. Market participants are increasingly expecting rate reductions, possibly starting as early as September, with some forecasting cuts totaling 100 basis points by the end of 2024. However, Powell has emphasized the need to avoid getting ahead of the data, suggesting a cautious approach to monetary easing .

The GBP/USD has recently dropped, reflecting market concerns over the Bank of England’s upcoming rate decision, which may involve a cut. This week’s economic data and central bank meetings are likely to bring significant volatility, especially in USD and GBP currency pairs

[Jag757]

Preparing for the trading day. Here is a quick analysis. I am not sure anyone is even taking the minute or two to read it but it helps me.

Chart Analysis for GBP/USD

4-Hour Chart:

• Trend and Moving Averages: The pair is trading below the 50 and 200-period moving averages, indicating a bearish trend. The 50-period MA is acting as immediate resistance around the 1.2860 area.

• Fibonacci Levels: The price has retraced towards the 61.8% Fibonacci retracement level of the previous downtrend and is currently consolidating near the 1.2860 level.

• Support and Resistance: The 1.2819 level is marked as a significant support area. The price has been oscillating around this level, indicating its importance.

• Indicators: The MACD is showing a lack of momentum, with the MACD line close to the signal line. The RSI is around the 54 level, suggesting neither overbought nor oversold conditions.

1-Hour Chart:

• Trend and Moving Averages: The price is trading below the 200-period MA and slightly above the 50-period MA. The consolidation around the moving averages indicates indecision.

• Fibonacci Levels: Similar to the 4-hour chart, the price is hovering around the 61.8% retracement level, suggesting possible resistance.

• Support and Resistance: The support around 1.2819 is reinforced on this timeframe, with the price testing this level multiple times.

• Indicators: The MACD on the hourly chart shows a slight bearish crossover, and the RSI is around 50, indicating a balanced market.

15-Minute Chart:

• Trend and Moving Averages: The price is below the 200-period MA and has recently crossed below the 50-period MA, indicating short-term bearishness.

• Fibonacci Levels: The recent move has retraced to the 38.2% Fibonacci level, with the price struggling to break above this level.

• Support and Resistance: The 1.2819 support level remains crucial, with the price showing a bounce from this area.

• Indicators: The MACD shows a bearish crossover, and the RSI is around 50, consistent with other timeframes.

Summary

The GBP/USD pair shows signs of consolidation with a slight bearish bias across multiple timeframes. The 1.2819 support level is crucial, and a break below could signal further downside. Conversely, a move above the 1.2860 resistance could indicate a bullish reversal. It’s essential to watch for a breakout or a breakdown from these levels, as the current market indecision suggests a pending significant move. Additionally, monitoring the moving averages for potential crossovers could provide further insight into the trend direction.

For August 1, 2024, several significant economic events could impact the GBP/USD currency pair:

United Kingdom:

1. Bank of England (BoE) Interest Rate Decision:

• Scheduled for 11:00 GMT. The market closely watches BoE’s rate decisions, as changes or hints about future policy can significantly impact the British pound.

2. UK Manufacturing PMI:

• The Manufacturing Purchasing Managers’ Index (PMI) is set to be released at 08:30 GMT. This index provides insights into the economic health of the manufacturing sector. An index above 50 indicates expansion, while below 50 indicates contraction.

United States:

1. ISM Manufacturing PMI:

• This report, due at 14:00 GMT, is a critical indicator of economic activity in the US manufacturing sector. It can provide insights into economic conditions and future trends.

2. Initial Jobless Claims:

• Scheduled for 12:30 GMT, this data reflects the number of individuals filing for unemployment benefits for the first time. It is an essential indicator of labor market health.

These events can create volatility in the GBP/USD pair, particularly if the actual results deviate significantly from forecasts

[Jag757]

I took a short position and have already taken half at my first target and moved the stop loss up and will continue to do so. Good Trade! I will explain later.

[Jag757]

I just hit my second take profit. It was a very good trade and a typical breakout but I was patient and waited for the second candle out of consolidation to swallow the first. I took 50% profit at my first target and immediately moved my stop loss into profit. I followed the trade with my Stop Loss until I hit my second target.

[Torchwave]

Thanks for the link to your thread,Jag757. With your permission, I will be contributing my thoughts and observations. Again, congrats on your GU trade.

[Jag757]

Absolutely, I would love to hear your thoughts and observations.