Retail traders still loading up on the short positions which, if the ratio holds, suggests further GBPUSD gains. I’ll take another look at this again in the morning and maybe make a call then.
OK the number of traders short GBPUSD has eased off slightly, I’ll look for a decent entry point to enter long next week and if I find one I’ll try and post as soon as I do it.
Looks like tweezer tops forming on the daily, I will be watching this pair next week for a short entry as well. After a 1200 pip run up, its reasonable to expect a retrace of 4-500 pips
Considering Daily/Weekly/Monthly still look bearish to me, this could be setting up a run to new lows. Obviously I am just looking at the charts to make this assumption as opposed to trading the “opposite” of the majority.
Cheers
Why would you want to go short when the long-term trend appears to be up? The market is making new highs and retail trader sentiment indicates more GBPUSD gains as most retail traders are still short even though the ratio wasn’t quite as extreme as it was.
Why would you take a position against the direction of the long-term trend? When a trend gets started it takes a lot to stop it, when the shorter-term trend is moving in a direction to the long-term trend it’s usually a correction rather than the start of a reversal and the long-term direction usually ‘wins’.
If you enter in the direction of the long-term trend at a decent price and the market moves against you as it did when I entered at 1.4731 providing the trend remains in your favour if you hold the position you’ll likely end up in profit (although just don’t hold on once the trend has reversed).
Why would you go against this by shorting the market?
Well you’ve said why I guess, you believe the bias is still down. I believed it changed to up around the time I posted this thread here. What exactly makes you believe it’s still bearish?
Its a matter of perpective, the daily/weekly/monthly charts still tell me we are still in a down trend. Price is still sitting between the 38.2 and 50 fib on the daily, barely at the 23.6 on the weekly… Price could retrace all the way to 1.68 and still we are in a downtrend.
In my opinion the GU strength is rubbish, and its only a matter of time before it turns and falls a 1000 or 2.
I agree the shorter time frames are bullish, but the long term trend is still down.
So taking a strategic short can be a good idea, as I’m sure you know price doesn’t go straight up, and the GU is due for a correction. I wouldn’t be surprised to see 1.54 to 1.49 next week or the following.
The last two posts have been great…I’ve been bearish the pound (fundamentally) for about a year… and donated a lot of pips to the market for trading my beliefs not my charts.
When it printed a bullish b-fly I went long. My first target is 1.58. I have no idea what could possibly be so great about the pound that we could see 1.58. Nor do I care.
I would love to short this thing, but my trade has rules and the rules stand. Worst case scenario I make 400 pips intead of 1400.
I don’t believe the pound is in a any sort of long-term uptrend, but I’ll take what I can get.
I would love to short this thing, but my trade has rules and the rules stand. Worst case scenario I make 400 pips intead of 1400.
Me too. My emotions are yelling at me to short the thing, my head says no bloody way. If you read back this thread you’ll notice that I was at the point where I was considering closing the position about a week ago but didn’t. Judging by the long/short ratios of several Forex brokers I wasn’t alone either! The retail traders poured on the shorts (and believe me I could understand why they wanted to) and bang the pair rallies 300 pips. I’ll write about why I think this happens later, but I’d like someone else to give me their opinion first, but if nobody offers theirs I’ll still tell you my theory…
Its a matter of perpective, the daily/weekly/monthly charts still tell me we are still in a down trend. Price is still sitting between the 38.2 and 50 fib on the daily, barely at the 23.6 on the weekly… Price could retrace all the way to 1.68 and still we are in a downtrend.
And there’s the answer as to why we disagree right there - not so much time perspective but methods for determining the trend, you’re into fibos. I don’t touch them, except maybe the 50 percent (middle one). That’s not to say I don’t believe they can have some validity, it’s just that they’re a lot more deceptive than they appear to be after the event. It’s the same with trend lines really. When you see them after the event they look so obvious, but they’re not. Take the current setup. As I said a week or two ago on this thread a triangle was forming with a fairly flat resistance line and a slopping support line. The flater the trend line is the stronger it is, so it was more likely than not that the support, not the resistance broke first. And it did. But the price didn’t quite fall past the previous low and it formed a parallel channel. Then the resistance was taken out. I wrote then that the support was probably weaker than the resistance but still believe we were in an up trend - reading the trend lines is, like fibos, pretty damn difficult.
In my opinion the best indicators for the trend are sentiment and price. In the following order of importance they are -
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Price making a higher high or lower low than x number of days ago. A new 20 or 30 day high or low is nothing much. A new 80 or 100 day high or low is pretty significant. But you gotta use your judgement on each case.
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Sentiment. Retail Forex is usually wrong.
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Movement sizes. Look for the BIGGEST candles, not the most frequent candles. For example, say there were 7 down candles and 3 up candles in a 10 day period. If the 3 up candles were huge it would, I believe, indicate that the big players were bullish and waiting several days for the market to fall before putting on huge positions to take out all the stops - hint as to why retail traders are usually on the wrong side.
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Long wicks. Long wick means the market tests a level and really wasn’t comfortable with it. As someone put it, a long wick is a sign the market was ‘spooked’.
EDITED -
the picture attached (hopefully) explains my thinking, well, that and the retail sentiment.
Ok I’ll try. I attended this webinar, one speaker named Stephen Leahy did a talk called “think like a dealer” in it… if I recall correctly, he mentioned he worked for a dealer, might have been FXCM, and he said, like others have said in this thread, that the average trader has more winning trades than losers but they still lose money. This means to me that they cut their winners short and let their losers run. So when the price is rising and SSI is showing lots of shorts it maybe cause the longs have exited for a small profit and the shorts are still hanging in there.
here is the webinar if it interests you.
compassfx.com/webinar/videos/StephenLeahy/StephenLeahy.swf
(sorry moderators I can not seem to post a link in text only, it keeps changing it back to a link.)
Also in this blog there are 15 minute charts of the SSI, has anyone got this platform and if so is it updated live every 15 minutes. I email FXCM and they say they only have daily updates but I don’t think the sales men know their own product.
twitpic.com/photos/DRodriguezFX
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Thanks 
Some good points there, I’ll comment further when I’ve watch the webinar
OK, I’m out of here. He posted a useful link only to have it edited out by a bunch of control freak editors. I’m of to a more ‘reasonable’ website. Can’t be arsed with this crap…
Last call, long GBPUSD.
The link is still usable just not click-able anymore, but yeah a bit control-ish especially as I checked in the FAQ and I could find nothing about posting links.
Anyway Todd Krueger just sent out an interesting video on how to notice the possible bottom of this last GBP/USD up move.
http://lib.store.yahoo.net/lib/yhst-77738661408691/TCVN071710.swf.
Target met.
Last pound long TP’d last night for +1371 pips.
I don’t care what happens next.