Trading The Trend For GBPUSD

I read this book for trend followers (traders) and there was a part where 2 men are having dinner at the table, a knife falls straight on this guys foot, so the other guy on the other side of the table asks 'why didnt you move your foot?' and he answers ' i was waiting for it to come back up'

The trend lines seem to have held up well this far though the market is increasingly getting anxious which might bring a pullback, in my case i think this would be just a small or big hiccup. The positive is that the price action keeps crossing over the Blue line. The closer the price closes to the blue line the more significant the pull back for the day, which is taking into consideration that all other factors are constant or on the positive side.

Where there is economic news on the trading day that moves market prices and traders reposition themselves, this i think, is because of the type of economic uncertainty that we are experiencing. Personally Friday is not my day for trading because there are too many things going on like going out to the pub so you close your trades prematurely because you just can‘t wait to reach your target if it takes long.

With the Chart below i wanted to show the graph with extended line please not that the extra lines are added as a guide that could help us have an idea of how low the price might go. Basically it‘s just the same as Lower-Lows and Higher-Highs only we are trying to use them in a trend line kind of way.

1 Hour Chart

When markets are getting volatile some rules are meant to be broken but the best move would be to step aside and watch things unfold before you take any action.

The MACD on the Daily Chart is in the process of putting in a bullish move but like before it has crossed too early and that might just prove the reason for a pullback after getting to the 1.67+ or the 1.68+ price range. I still maintain a bullish GBP and one of the big reasons is that not only are things positive for the British economy but also that the currency is well supported by several Banks who see the pound heading higher.

Daily Chart

Have a look at the Daily chart today‘s price action has actually brought the price close to top of the forming right shoulder. The Head and Shoulder pattern in current market conditions have not really lived up to their name, but sometimes they do bring quiet a significant pullback such as what happened with the EURUSD sometime back. I keeping bringing up the EURUSD head and shoulder that never was simply because at the time it was everywhere, in the news Bloomberg which i watch a lot, you name it. On that trade i almost made £2000 but because i was holding on to the trade to wait for a big drop i walked away with £1200. After it didn‘t go back down i was happy i pulled out before it was too late, anyway it is not good to lose hope in the chines Head and Shoulders as it will live up to it‘s name at some point.

I am learning and sharing so if you have trade ideas please drop us a comment or suggestion.

P.S keep in mind that the possibilities of a significant pullback might be on the horizon but with no risk you dont make money, its like they say, No Pain No Gain