Some of my thoughts + Trading System

[elang]

GBP/USD

Cable continues to trade sideway below 1.9777 high today. At this point, with mild bearish divergence condition in 4 hours MACD and RSI, a short term top is likely in place at 1.9777 already. Hence, further consolidation is in favor as long as cable stays below 1.9777 high. Risk remains for another pullback towards 1.9587 cluster resistance (38.2% retracement of 1.9261 to 1.9777 at 1.9580. However, we’d expect downside to be contained above 1.9452 cluster support (61.8% retracement of 1.9261 to 1.9777 at 1.9458) and bring rally resumption. Above 1.9777 will indicate rise from 1.9261 has resumed.

In the bigger picture, correction from 1.9846 has completed after three waves down to 1.9261. Hence, further rally is expected to follow to 1.9846 high and then 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9917. But, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067).

On the downside, below 1.9452 cluster support will argue that price actions from 1.9846 is developing into extended consolidation and will shift focus back to 1.9177 cluster support (50% retracement of 1.8517 to 1.9846 at 1.9182, 23.6% retracement of 1.7047 to 1.9846 at 1.9185).

[elang]

Retracement rules would say long when a whole candle closed over 75%, but considering that we have 9777 Reistence just up ahead i am sort of reluctant.

Perhaps the best thing to do would be to find another active wave above 9777 and wait for a long signal there.

Its just difficult to trade around these levels, where nobody knows yet if we have a TOP and a reversal or a rally resumption.

Either way… we need to wait for now.

Regards,
E. Lang

PS: The currently active wave is bearish or a downwards wave, and since the price retraced to 75% of it and closed over 75% we call the active wave a corrective one AND a corrective wave is always in the OPPOSITE direction of the main trend. So if it is facing down, then the main trend should be up.

Once you have that information you check your DAILY RSI and other indicators to confirm if the trend is up (RSI > 50), if it is, then this system says you are ment to long, but like i said before, im reluctant considering 9777.

UPDATE:

You will notice on Chart 4 that i have drawn a new active wave, for us to continue holding our long this active wave needs to be defined as an upwards impulsive, which means its retracement should reach 38.2 - 61.8 and then pop back up in an impulse all in all forming One impulse upwards, one correction downwards and one more impulse upwards.

We wait and see.

[elang]

Good morning guys,

Yesterday was a very boring day for me since i trade GBP/USD.

There was hardly any volatility if not any at all.

My long trade yesterday went ok i guess, but i closed it today at the high with only a 15 Pip gain. I had my stop loss set, but i terminated the position today as i didn’t like the way things were looking plus, if you take a look at M15 you will realize there is a serious EMA Bunch at the moment, so we know there is going to be a breakout soon.

We’ve broken over 9777 thats clear and the next major target after breaking 9800 Psychological resistence is 9846

Rumours has it that some big boys are setting stops above 9800 and they seem to be piling.

Frankly considering all the short term bearish signs and the lack of bullish aggression i wonder if we will be able to raise enough coordinated havoc to break through short term stops talk less of major targets like 9846.

RSI is looking flat as a Sunday morning pancake with chocolate spread.

My recommendation for now is to wait it out and long over a decisive break of 9800, because naturaly it is over this level that buyer interest will resume and we may see a good push up to 9846. If you’re a real hot shot you could buy around the break of 9791 and ride the rainbow up.

Either way we need some good bullish initiative to get RSI of its back and put things back in movement.

If we get a break and small rally i expect it to be at least 40 pips, so if you buy at the break of 9791, you will be sure to bag in 40 pipos guaranteed.

Thats pretty much it.

Regards,
E. Lang

[elang]

Everything is going well guys and the most troublesome tops have been taken out for now.

A good bullish signal would be to have a whole candle close above 1850 on H4 now.

EMA spreads are loooking very fresh and RSI is back of its hindie now and doing its thang. It pretty much looks like clear sailing from here onwards, just keep on redrawing your fibs at every major correction and sail safely.

I’m long since the break of 9791 @ 9799, my initial stop was below the last low, which at that point was 9772 so i set it at 9769. After the next move upwards i respectively moved my stop to break even at 9799.

On the next move up i will move it to the next nearest low (9810)

Good luck guys

Regards,
E. Lang

PS: If at some point while monitoring a correction the price closes under 25% and you get an exit signal you will have two options.

1. To Exit
2. To take the L of your fib and move it back down to the previous waves L.

This way you sort of broaden the perspective and in a lot of cases the price will correct a little deeper than if you’d used the current waves Low for the FIB, but it will come back up and rally - you can also do this by just going on a highter time frame and drawing the fib there.

[elang]

UPDATE / Chart 6 / Wave 4

L: 9827
H: 9913

Correction probability: up to 50 pips

You can find charts 1 to 5 in the previous post guys.

Regards,
E. Lang

[ahefner33]

Elang

Hey there. Yes I with you on yesterday being a VERY boring day for the GDP/USD. I got it in early Monday morning (Long) and only bagged 21 pips when I closed the position. Quick question, are you using 15m charts now for your entry/exit analysis? I noticed on your charts with this time frame. How is that working for ya? Well keep up the great educational posts. Thanks

ahefner33

[elang]

I’ve closed my long with +76 pips.

Even though there is a good chance the price will come back up now to resume the rally i’m leaving my trading desk so i’m closing out all my positions and i don’t care if i’m missing out on the trade of the century, because there will be another one tomorrow

It will be bad news if the price decisively breaks the upwards trend line which you can see on the attached chart, i would expect a bounce of that and a resumption for 2.0000

More on Monday guys,
Good luck to everyone and trade safely!

Regards,
E. Lang

[elang]

Good morning guys,

23.01.06: “It will be bad news if the price decisively breaks the upwards trend line which you can see on the attached chart”

Well call me a donut, but it did and it went weee all the way down.

After looking at the charts today, i am glad i closed my long at .9875

I remember saying that it would be a good bullish signal for a whole candle to close over .9850 on the H4 chart. Obviously though the bears over powered the bears and managed to take the price down before a whole candle formation completed.

The price is currently around the .9770 level now.

Considering all the bearish signals we had on the larger time frames we have two probabilities having in mind the facts now.

1. Either we have the top finaly formed and we are going to pop back down into the consolidation channel of .9833 LOW to .9850 HIGH after ofcourse breaking through R turned S of 9750/9755

OR

2. We consider this decline a correction of L: .9587 H: .9913 with 50% at .9752, 61% at .9713

For now the decline seems to have lost steam at the 50% level of .9752/ish.
If this level holds we will see a rise back to test the new H of .9587, a break of which will signal the resumption of the rise towards .9917 and 2.000 Psy-R.

We should have some sort of confirmatory movement to the upside or downside when London opens.

The bears seem to be taking over i feel… and i can’t blame the poor bulls, they waited for so long to get a chance at .9846 and sorta of blew it.

Clouded and mysterious the bear side is, my fellow pippawans.
Patient we must be untill these intentions stronger become… hai!

If you are short already, your targets should be: .9712 > 9590
If you aren’t short yet, short when the price breaks below .9750 and you have a good E-S/E MA Cross over on H4

5/10 EMA Crossover or 6 EMA 13 SMA Crossover

If price action in the next hour complements the present i will be shorting once i get a good MACD Crossover on H4 [ Note the attached H4 chart ]

Other General Sentiments:

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GBP

Sterling rallied up yesterday to get over the historical resistance at 1.9850s to reach to 1.9917, but it got back to close at 1.9812. This move is a little bit risky, so we expect Sterling today to drop down until 1.9760s then might give it another try to move up to 1.9850s and then 1.9880s levels.

The general trend is up as far as 1.8850and 1.8460 remain intact, targets will be at 1.9858 and 2.0000.

The key resistance at 1.9850 and the key support at 1.8960.

Support: 1.9790, 1.9751, 1.9723, 1.9704, 1.9674
Resistance: 1.9822, 1.9860, 1.9893, 1.9917, 1.9946
Recommendation: We expect selling sterling below1.9840 with a target at 1.9760 and stop loss above 1.9893.

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Regards,
E. Lang

[elang]

Guys,

Remember to maintain your composure.

Wait for a good EMA Cross before you short!

We broke below .9750 R turned S / 25% of L: .9260 to H: .9913

There is plenty of pips to come, the important thing is to keep diciplined, nobody else can force you to do it but yourself.

The sooner and more often, the better.

Don’t forget you are the Boss and the Employee here.

Regards,
E. Lang

PS: Note on the attached chart, how precisely the fib levels 75%, 38.2 and 50% align with previous R and S. It’s beautiful

PSS: The news!! : Easy-Forex: The Financial Calendar

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GBP/USD

Cable retreats sharply after rally from 1.9261 was limited at 1.9913. Break of 1.9771 support, with bearish divergence condition in 4 hours MACD suggest a short term top is formed. At this point further consolidation is expected to follow with pullback towards 4 hours 55 EMA (now at 1.9685).

However, downside should be contained by 1.9588 cluster support (50% retracement of 1.9261 to 1.9913 at 1.9587) and bring another rise.
On the upside, above 1.9913 will indicate recent rise from 1.9261 has resumed for 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9971 and then 2.0000 psychological resistance.

In the bigger picture, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067). Right now, bearish divergence is being displayed in daily MACD and weekly RSI. However, a break below 1.9588 is needed to turn short term outlook neutral first. Otherwise, further rally is still in favor.

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[elang]

This is a Logical Correction, so don’t chicken out just yet.

The MAs: E-5/E-10 or E-6/S-13 may crossover around this area, but that would most likely be due to the consolidative action taking place now, rather than a rally.

Never the less price action above .9800 will indicate the rally has resumed for retest of .9913 > 2.000

Regards,
E. Lang

[elang]

This is currently a correction of 38.2 % on H4, if we manage to break through this we will be targeting .9588 next.

Considering that we are bouncing of 38.2 % it is possible that the correction on M15 may be larger than the last few.

Price action above .9771 may mean the rally has resumed for the last high of .9913

If you haven’t i reccommend you break even now or at least move your stop loss to -10.

Try and minimize your losses at all times.

My bet is that we will reach at least 50% on H4 before retracing to test the highs or maybe not, maybe this was it and the bears are taking us back down to .9260… we never know, humans, hence the market is difficult to predict at moments like this.

Regards,
E. Lang

[elang]

Good morning guys,

Not much has changed since yesterday, i expected a little more down movement, but it seems we will need London to open for that to happen.

H4: Bearish, so look only for short trades
D1: RSI is still over 50, but i feel we will have it dip below finally today, which will be an even bigger indication of bearish intentions.

Right now on H4 the price is located right below 38.2% of .9260 to .9913 at 9653/ish

It stalled after it broke 38.2 on H4 the price started ranging on M15.
Our current wave is with a H: .9700 and L:.9643

A break above .9700 will indicate an attempt at .9770
A break below .9643 will resume the decline to 50% of .9260 to .9913 at .9588

Price action above .9770 as i mentioned yesterday will indicate rally resumption to retest .9913 > x > 2.0000

I personally set my target to .9600 before i left yesterday, i was hoping it would have been hit by now, but obviously that wasn’t the case.

It is possible that we may have a larger upwards corrective wave (Corrective waves are opposite the direction of the trend) since we’ve hit 38.2 and then have a resumption to test 50%.

It is also possible that the price doesn’t correct unordinarily and just declines to 50% directly.

Either way the overall momentum is bearish, so look only for short trades as most long signals will be corrections and probably wount go too far at this time.

If you are not short yet a good entry is below .9643

Move your stop losses and minimize your risk if you haven’t already done so.

Regards,
E. Lang

[elang]

As you can see guys the short term descending trend line has been broken.

If the price continues this movement our next targets will be .9970 > .9800 > .9913 respectively

As i said in my previous post today:

“It is possible that we may have a larger upwards corrective wave (Corrective waves are opposite the direction of the trend) since we’ve hit 38.2 and then have a resumption to test 50%.”

That movement is currently taking place, so if .9970 holds we may have another impulsive decline to retest 50%, otherwise its back up to test the highs.

Regards,
E. Lang

[elang]

I wanted to brag as my broker Forex.com / GAIN Capital has finaly released the Beta version of their new Trading Platform.

The UI is very user friendly with soft, mild, relaxing colours.

It is totaly configurable a la Marketiva, so you can switch things around resize, pile, stack, pin down, detach from platform if you want to move a particular window to another monitor.

Regards,
E. Lang

[felius]

Hey i just wanted to let you know that I am using your system you developed. I have had good success with it when I stick to it lol. I am still a noob to forex and still demo trade with emotional impulses that get me into trouble. Anyway thanks for posting.

[elang]

GBP/USD

Daily Pivots: (S1) 1.9543; § 1.9612; (R1) 1.9667; More

Cable continues to struggle around 1.9588 cluster support (50% retracement of 1.9261 to 1.9913 at 1.9587) and is still bounded in tight range trading today.At this point, further decline is still in favor as long as cable stays below 1.9679 minor resistance. Sustained break of 1.9588 will bring further weakness towards rising trend line support (1.8517 to 1.8834, now at 1.9467).

On the upside, above 1.9679 resistance is needed to indicate that fall from 1.9913 has completed after drawing support from 1.9588 cluster support. Rebound should follow in such case. But still, break of 1.9913 is needed to indicate recent rise from 1.9261 has resumed for 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9971 and then 2.0000 psychological resistance. Otherwise, risk of another fall remains.

In the bigger picture, as discussed before, in case of further rise, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067) as the whole medium term up trend from 1.7047 could complete at or below this level.
Right now, we already have bearish divergence conditions in weekly RSI, daily MACD and RSI. sustained break of 1.9588 cluster support will be the a warning that whole rise from 1.8517 has completed earlier than we thought. Break of mentioned rising trend line support will confirm such case and bring much deeper decline towards 1.9237/61 cluster support (23.6% retracement of 1.7047 to 1.9913 at 1.9237). Decisive break of this 1.9237/61 cluster support will add much weight to the case that whole medium term up trend from 1.7047 has already completed and much deeper decline should be seen towards next cluster support at 1.8834 (38.2% retracement of 1.7047 to 1.9913 at 1.8818).

[elang]

Good morning guys,

We are still looking only for short positions for the time being, try not to enter long as it will most likely be a correction.

I am currently eye-ing 61.8% on H4.

Daily RSI is dipping below 50%.
MACD is below 0
Stochastics are bearish

Naturally there are two possibilities, one bearish and one bullish.
Although the factors are overwhelmingly biased to the bearish side at this point in time we need to be prepared for any outcome.

On the downside: A break below .9558 will signal the break of the trading range and resumption of the decline for 61.8% on H4 and perhaps even 75%.

On the upside, the possibility is that we have a bounce off 50% on H4, in which case we will consider the decline from 9913 merely a correction of the rally. We will never the less still need take out the recent top of 9679 to solidify the move upwards, towards targets .9734 > 9913 > 2.0 Psy R

Regards,
E. Lang

[elang]

There is a potential Long play on GBP/JPY

The charts speak for themselves.

Regards,
E. Lang

[elang]

Hello guys,

Not much has changed since i posted earlier today.

The bias is still bearish regardless of the scary looking dojis on H4.

As long as the decending trendline resistance remains in tact everything still looks bearish to me.

Regards,
E. Lang

[elang]

UPDATE:

The price continues to decline.
Trading days like today are not for the novice trader, today only people with great patience trade.

My sentiment is that the price will continue to declines untill at least a little bit below 61.8 where it will coincide with the ascending Trendline Support on D1.

Two things will happen as always when we reach our target.

A: We have a bounce off, which means we will concider the bearish price action from 9913 a correction and in opposite direction to the main trend (bullish)

OR

B: We will break below the trend line and weeeeeee down to targets the likes of 9422 > 9260, which means we will consider the decline from 9913 as impulsive and in the direction of the new trend (bearish)

Of course there is also the possibility that neither of these manifest and that im just a sorry wannabe caramel donut of a trader

Don’t forget to set your Stop Losses!

Regards,
E. Lang