Thread: Discuss the GBP/USD with a DailyFX Analyst

Originally Posted by Thomas Long

Nice pictures Sean....big too!

I try to make them as "life like" as possible...they're almost as tall as me. hehe!

Originally Posted by Steve Brown

I recognize the gentleman on the left as Steve Forbes.

For what it's worth, today I bought July call options on GBP/USD, with a strike price of 1.4925. I can't say it has hit bottom, but I recall that GBP can become a monster when it gets into an uptrend on the daily graph. I think the new coalition government in Britain may be positive for the pound, in the wake of optimism after ousting the Labour party from power. A coalition of conservatives and liberal democrats is unlikely here in the USA, although I recall a brief period of national unity in the aftermath of 9/11/2001.

Yeah, I was on a TV set with Steve about 6-7 months ago now.

That makes my night dont know if i should sleep tonight or wait to see what Asia does got a long good weekend ahead of me

Originally Posted by cw1

ive been trading 8 years and when i found this forum , ive been amazed ever since , its almost like we are all cheating because of the info on trend analysis etc,etc gives us the upper edge, however its no different from working say in the city, as they are all using same info plus insider dealing....i totally agree with you PG. Reckon thats why Sean has lost all his hair...rom the sheer excitement ,,tee he!!!!!

Originally Posted by PoundGuy

That makes my night dont know if i should sleep tonight or wait to see what Asia does got a long good weekend ahead of me

I've got a feelin they may do the same like this morning , they started buying in about 6 am Uk time. It went up a good 76 points , ibwent through the night once trading all night while my wife and daughter slept ! Not as fast as our trading hours. Maybe if you've got sone decent profits there , perhaps lock some in

i am several pips up on the week and i have taken half off if asia sells then they will probably set a high for friday unless something comes up tomorrow. Should our session pop up am sure there will be ready sell orders.

TThe senario can change if we hear another of these fake weekend allowance meetings for the big officials. Other wise Asia might jus set baundaries for the weekend all theing being constant meaning trend to down side on a very choppy friday

Originally Posted by cw1

I've got a feelin they may do the same like this morning , they started buying in about 6 am Uk time. It went up a good 76 points , ibwent through the night once trading all night while my wife and daughter slept ! Not as fast as our trading hours. Maybe if you've got sone decent profits there , perhaps lock some in

That's a good point, I need to be on guard tomorrow and finish early as Fridays has a habit of going back the other way on the bounce back and can get easily caught out, in London many of the firms trading close there positioons or load up longs to hedge any news activity over the weekend

Originally Posted by Sean Hyman

Yeah, I was on a TV set with Steve about 6-7 months ago now.

It must have been a big-screen TV set to hold you two guys, without one of the legs collapsing.

Weekly chart isnt looking so hot now that 4700 broke. 4400 was a prior support area and then we don't have support until 4250 and on to 3950. Looking over the weekly.. this is only the 1st pull back since 5700 broke. We still have 2 more lows to set. Not until we fail to make a new low will I start thinking long. There should be plenty of other places along the way to add shorts as pull backs on the 4hr and daily chart will allow.

Market law 3
“If a pair fails to make a new low, after it has already made 3 or more lower lows, it will make a new high. Conversely, if a pair fails to make a new high, after it has already made a series of higher highs (3 or more), it will make a new low on the next move.”

Originally Posted by djindyfx

Weekly chart isnt looking so hot now that 4700 broke. 4400 was a prior support area and then we don't have support until 4250 and on to 3950. Looking over the weekly.. this is only the 1st pull back since 5700 broke. We still have 2 more lows to set. Not until we fail to make a new low will I start thinking long. There should be plenty of other places along the way to add shorts as pull backs on the 4hr and daily chart will allow.

Market law 3
“If a pair fails to make a new low, after it has already made 3 or more lower lows, it will make a new high. Conversely, if a pair fails to make a new high, after it has already made a series of higher highs (3 or more), it will make a new low on the next move.”

Hey dj
Was wondering what TF that applies too? More importantly, What are market laws? And where are they published?

A-Yo Bro

Originally Posted by AyoBro

Hey dj
Was wondering what TF that applies too? More importantly, What are market laws? And where are they published?

A-Yo Bro

The Failed new high / Low law works in any time frame. Preferbly better to stay in a 15m or larger. they are easier to count that way. Look back over some of your charts in the time frame you are usually trading in. Looking specificly for these failures will help you spot retraces and trend reversals easier. Up trend is always higher highs / higher lows. Down is Lower lows and Lower highs. When you get a failure of either is where this applies. The bands on my charts really help me spot these. Hourlys are pretty clean charts to spot them to. I'll post the 4 laws here and then I'll repost them in my blog with Chart mock ups.

It's not just about knowing the laws that is important. It is how you intrigrate them into your trading and use them to take entries and exits.

During MOVING market environments, FX pairs and other tradable items tend to follow through or continue the most recently completed color-coded bar, 80% of the time, as long as most of the color has been maintained.

Sir Isaac Newton: “An object in motion tends to stay in motion.”

Different ways to communicate the law:
1) After a solid Green Bar, expect another one to follow 80%;

2) After a solid Red Bar, expect another one to follow 80%

3) The bigger the green or red bar, the higher the odds of follow
through, meaning you’ll see continuance closer to 90% of the time

4) A small amount of green or red does not give the Trader

enough to go on. More information is needed in that case

The market never accomplishes anything with just one bar. It needs at least two bars to regard something as being real or significant.
Follow-through by a second bar is crucial, otherwise the one bar event, no matter how apparently significant, is not yet real.

Different ways to communicate the law:

1) A one bar breakout is only significant if followed through by a
second up bar;
2) A one bar breakdown is only significant if it’s followed through by
a second down bar;
3) One bar events not followed through on tend to eventually produce strong opposite moves.

“If a pair fails to make a new low, after it has already made 3 or more lower lows, it will make a new high. Conversely, if a pair fails to make a new high, after it has already made a series of higher highs (3 or more), it will make a new low on the next move.”

Different ways to communicate the law:

1) The first failed attempt to make a new low in a well established downtrend is the first sign that the balance of power has shifted from the sellers back to the buyers. The tend has likely changed and the first low in the new trend has been identified.

2) The first failed attempt to make a new high in a well established uptrend
is the first sign that the balance of power has shifted from the buyers back to the sellers. The trend has likely changed and the first high in the new trend has been identified.

3) The first failed attempt to make a new high or low in a well established
trend is the first sign that the back of the existing trend has been broken and the opposing side is ready to regain control.

Different ways to communicate the law:
1) Explosive moves almost always originate from narrow range bars.

2) The market is a breathing mechanism. It inhales (contracts) and exhales (expands).When it inhales (contracts) deeply, a major exhale (expansion) will be the result. Narrow range bars (NRBs) are the sign of a deep inhale. A major exhale usually is the result.

3) A cluster of small bars signifies the calm before the storm, the sleep before the awakening.

4) The Trader will look to commit more to trades that involve NRBs. The combination of lower risk and bigger potential reward warrants it.

Originally Posted by djindyfx

During MOVING market environments, FX pairs and other tradable items tend to follow through or continue the most recently completed color-coded bar, 80% of the time, as long as most of the color has been maintained.

Sir Isaac Newton: “An object in motion tends to stay in motion.”

Different ways to communicate the law:
1) After a solid Green Bar, expect another one to follow 80%;

2) After a solid Red Bar, expect another one to follow 80%

3) The bigger the green or red bar, the higher the odds of follow
through, meaning you’ll see continuance closer to 90% of the time

4) A small amount of green or red does not give the Trader

enough to go on. More information is needed in that case

It is an interesting concept but I find it difficult to apply in the current situation. The last weekly bar was not solid. So Law 1 is not applicable. Yes on the weekly chart, there was already three lower low, but is last week low the third lower low OR is it going to be this week's low instead? Unless a pivot has formed, maybe we can get some answer next week. It appears to me that both the above law does not help in real time decision making for the current situation especially. Maybe I missed something. Glad if you could point out.

Thanks