An interesting article in the FT suggesting that the forex market’s current love affair with sterling may be overdone prompted me to look at bit more closely at the British Pound and, in particular, the Pound Dollar pair daily chart. Since the 7th January we have seen a remarkable recovery with the pair climbing from a low of USD1.5406 to hit a high earlier this week of USD1.6059 before pulling back to close yesterday at USD1.5972. Indeed yesterday’s yesterday’s shooting star candle was also an inside day, giving us a strong signal that the rally may now be running out of steam and coupled with the previous day’s deep shooting star candle these are both bearish signals. Furthermore, in today’s price action (although at an early stage) it looks as though we could be looking at a hanging man candle which would further confirm the oversold nature of sterling at present. However, as always we must be patient and wait for market sentiment to confirm and for the chart to speak to us.
Today’s fundamental news for sterling has included the CBI Diffusion Index which has just come in much worse at -16 against a forecast of -1.
Anna, downloaded the 55 page guide, at first glances it is excellent ,will give you a full reaction when I have completed. I noticed your comment about mentoring and I would be interested as and when. I had already thought that some time however limited would be useful for someone like me who is getting to grips with this complex and exciting subject.My aim is to be up and running to supplement what will be a liveable but not paricularly stunning pension later on this year.I am trading cautiously in Forex having trained and traded shares up until the point my broker Echelon went to the wall taking my account with it however by persevering I got all my loss back via FSCS.
What I really need is a pattern of activity for trading for the long and medium and term with a bit of occasional short term.An idea of a typical pro traders day/week would be a great help.
In the meantime thanks for your guidance
regards
Ron
Hi Ron
Many thanks for your kind comments and just to let you know I have written back to you privately which I hope is OK. All best wishes and good trading – kind regards Anna
hello anna
I’m trying to read candles as well as other indicators, but my charts are looking differently.For example on 18th instead of shooting star I have regular looking candle(upper shadow 35 pips, real body 80pips and small lower shadow). On 19th instead shooting star I had reversal, similar looking candle as on 18th but different direction. On 20th my freestockcharts.com showed spinning top touching EMA10 ,while my Oanda (platform I “trade” from ) showed me near perfect long legged doji piercing EMA10 with its lower shadow.I’m confused. Would you know the explanation of this?
regards
Hi Pawel
Many thanks for your comments and I agree it can be confusing. Unfortunately the reason for this is that none of the data/chart providers have a consistent time at which they switch from one time to another, so some charts will change over late in the evening during the US session, whilst others will start a new session somewhere in the Asian trading session. As a result this leads to different candle patterns when looking at the same timeframe, and indeed this can be confusing with the same chart looking very different depending on who you are looking at ! The only answer I’m afraid is to stick with the one you like and not to validate with other charts – hope this helps and good luck with your trading. I also use Oanda as one of my accounts and they have improved their charts hugely – much better than they used to be and more accurate – good trading and thanks once again – Anna
Hi Anna,
Looking at the chart I would agree that there is high probability a correction due. Rightly, you advise that patience is required “and wait for market sentiment to confirm and for the chart to speak to us.” I’d be very interested to learn what confirmation you are looking & when you’d take a short position?
Best regards,
David.
Hi David
For sentiment towards the dollar I use the dollar index. I also look at commodities (the usual suspects: gold, oil, silver & sometimes copper) as well as the VIX for equities. Snippets of news such as item in today’s FT that there’s been a major shift at the CME from bearish to bullish on euro is always useful. Although small sample this type of info starts to percolate into the minds of traders & investors (rightly or wrongly). Correlation between gbpusd & eurusd which has been patchy lately. Fundamental news for the week – tomorrow is UK gdp & BOE bank minutes so we could all be ambushed. Finally, the chart itself: strong candles such as shooting stars at tops of rallies can generally be relied upon BUT (huge but) depth of move may be short lived depending on support & resistance, such as fib levels. In summary: a bit of a cliche but it really is more “art than science”. Hope this helps. Good luck. anna