Somebody Knew Something:
The news that rattled the GBP/USD came out at 08:30 GMT. The news spike began at 08:26, and by 08:30 the pair had already dropped 55 pips.
I wonder how much the heavy-hitters pay for an advance tip-off?
The 1-minute chart shows the front-running which occurred pre-news.
Here’s what DailyFX had to say earlier this evening: Pound may be Oversold, but Data Continues to Deteriorate
More later.
Clint
Notes on the London Overnight Breakout Strategy for Wednesday morning:
The Period HIGH and LOW have been in place for over 4 hours, and the price pattern in tonight’s box looks orderly and trade-able.
There is strong resistance 7 pips above the HIGH, but a breakout to the upside will likely take it out without great drama.
From that point, the next strong resistance is 48 pips away.
The situation is tackier on the downside: there are several support levels close together between 1.6100 and 1.6080, which the pair will have to plow through. Once that band of support has been breached, the next 50 pips down are free of significant support.
News is not an issue this morning.
Whatever worked for you Tuesday morning, should work again this morning.
Resistance and Support levels for Wednesday morning:
S – 1.6100 – century mark
S – 1.6095 – July 6 low – STRONG
S – 1.6081/80 – June 4 low / July 7, 9 and 13 multiple candle lows –STRONG
S – 1.6032 – July 13 low – VERY STRONG
S – 1.6000 – MAJOR century mark – VERY STRONG
S – 1.5982 – July 8 low – VERY STRONG
Scheduled News Releases:
No high-impact GBP news Wednesday morning. One medium-impact news item: Construction Purchasing Managers’ Index
at 08:30 GMT.
No USD news until 12:15 GMT.
Entry Orders:
BUY 1.6184, SL(30), TP(20)
SELL 1.6106, SL(30), TP(20)
Last time was a winner. Let’s do it again.
Clint
yep, i’m on it.
although i’ve got my buy on 1.6182.
clint, your 1.6184 is because of the additional spread, correct?
Clint, I have the same entry points as yourself, but am again going with a 24/48 ratio. Looking at just where the candles closed (excluding the spikes), I see a range of 1.61182 to 1.61669, a range of (you guessed it) about 48 pips. So I am banking on no retracements after the trigger greater than my 48 pip SL.
Thinking of letting it go, but am now noticing that, the same as last night, the first couple of candles after midnight have already nudged up past our High bar. As it’s too early (again) for the actual London breakout, I’m pondering whether I ought do as I did last night and nudge that Long entry point a little bit further north to accommodate this movement.
Guess I’ll be sticking around to watch this for a few minutes, after all. 
[B]beehjae, [/B]
On my platform (FXCM) the HIGH for the 10-hour overnight period is 1.61752 (bid). I rounded that off to 1.6175 and added 9 pips to it to get my Buy Entry price of 1.6184.
The 9-pip addition is: the 6-pip buffer + 3 pips for the spread.
The 3 pips for the spread is [B]on the Buy entry only[/B], because we don’t buy at the Bid price, we buy at the Ask price, which is higher than the Bid price by the amount of the spread.
To walk you through it step by step, the HIGH is 1.6175 (bid) and 1.6178 (ask). When the price rises 6 pips above the HIGH, it will be 1.6181 (bid) and 1.6184 (ask), at which point my Buy Entry order will be triggered (that is, I will Buy at the Ask price of 1.6184).
Your broker’s typical spread on the GBP/USD may be something other than 3 pips. You should add [B]your[/B] broker’s typical spread to the 6-pip buffer to get [B]your[/B] Buy Entry price.
[B]Merchant,[/B]
If you’re nervous about those probes above the HIGH line, you can move the Period HIGH up 7 pips. Then your revised HIGH will be at the same level as the 15:50 GMT candle high. (That may be a more natural Period HIGH than the one we are using.)
If you make this change, then your Buy Entry price will be adjusted upward to 1.6191.
Yeah, after those two candles early on moved above the channel, the price went back down within the range and we await the breakout per normal. I had moved my Buy entry a grand total of three pips upward as a result of those two probes.
i see. that’s well explained.
i hope it breaks clean. 
am i seeing things? it’s like a penant forming 
Well, that sucks.
I think every SL up to, and including, 50 pips just got hit.
This morning was just like most of last week — crappy.
I’ll talk to you guys later.
what sux is knowing ahead of time what the price is going to do and still not trading it the right way 
ahh it’s only money… I’ll make more
i admire your spirit.
reminds me of a favorite movie quote
“endeavor to persevere”
-Chief Dan George from the Outlaw Jose Wales
I’ll bet Clint gets that one !
I second that sucking and raise you a royal sucking. Wow.
Even after moving my long entry a few pips up it still triggered and then jackknifed the entire range! Then, of course, after stopping everyone out, it did indeed perform the true breakout, you guessed it, long.
I’m beginning to think you can’t even trade this until 3 am, period.
Merchantprince
I guessed it long early on for a break North Took 72 pips this morning before closing out the trade.
Might be better to place your trades as late as possible? Breakouts tend to be around 07:00 - 09:00 GMT.
I hear one of our regular US contributers on this thread did the same this morning (GMT) and picked up some big pips before closing out and heading off to work.
Dont get me wrong. I think this strategy is well considered and well researched before entries both ways are formulated. It just seems to me a ‘set and forget’ aproach is risky! I think a late as possible entry and manually triggered is safer even if it means getting some red eye. Perhaps ‘set the alarm clock and forget’
Yeah, that would mean staying up pretty late, around 3 am my time, to set this up. But may be the only way to do it. [searches for setting to time delay entry points]
non farm employment reports, ecb reports and other unemployment coming out tomorrow. Probably causing the lack of price movement today like the last time similar reports came out. Sideways price for 1 or 2 days.
SanMiguel
Lack of movement? :o Made two profitable trades today over a 150 'ish pip range. I’ll take a day like today anytime.
I on the other hand just got boned by my broker. Trading the upward channel on GBP/USD atm, had a new buy order set at the [I]same price[/I] as my stop loss on the current trade; got stopped out, but the new Buy order was not filled. Of course, the price went back up and would have covered my loss.
Thanks, FXCM. :mad:
