WHAT NEXT FOR GBPUSD AFTER OUR TARGET

In our previous article, we discussed the sell entries and targets. We have seen a swift follow through as price hit our our ultimate target.  Congratulations to those who followed up the setup.

So now lets discuss the current price action on the daily and 4 hour time frame.

DAILY CHART

Comparing the current swing with previous major average swings on the daily chart above, before price would have a corrective move, the daily major swing is almost completed. 

The downside momentum is still strong so despite the major swing being almost completed, we have no sign of any reversal. If you put a 21 SMA on your weekly chart,  you will notice that  the weekly price is in the SMA zone support which is also likely to halt the price. 

The daily price is sliding along trendline T and also into major support zone but since the momentum on the downside is still quite strong so we may see price go for lower lows. 

1.27610 support zone marked V is likely to be the immediate target if price closes below T. Price may fall to 1.26365 support zone marked Y if the momentum stays as strong before we see a significant correction .

4-HOUR

The 4 hour chart like we discussed in our previous article, we use it for entries.

The price is also sliding along trendline support T as shown in the above chart.  Close below the small H4  Pink trendline support, may run into support zone marked V as we discussed above.

GOLD (XAUUSD) INTRADAY ANALYSIS

4-HOUR TECHNICAL ANALYSIS

Gold has run into a channel as it hits the large daily resistance. The channel can be clearly viewed on the 4-hour chart below.  In our previous analysis, we discussed the V pattern movement on gold. if you didnt follow it up, you can check it here. V patterns are common congestion price movements especially as price lands into major support/resistance zones

Price in the channel is moving in clear V patterns so the most likely neXt move is a more push to the downside to test the lower level channel trendline B. The price on the 4-hour chart is now mid channel being held by the 21 Simple moving Average support.  Candle close below SMA may land into that small blue trendline support marked T. Close below T may give us the ultimate push through to retest B trendline support.

If price breaks the channel on the downside, and we may be just a retest of the lower channel without price beating the the highlighted high, which is mostly likely to be on the daily 21 SMA. aIf that happens, we may have a larger daily correction.

 But for now, lets keep it within the channel as we await the price action

BANKS SHOULD REALLY BE SCARED: ITS ADAPT OR DIE

I tend to think large bodies just like highly learned folks forget the basics. And the basic truth is that the power is with the people. What people have accepted and what works with ease is the deal. 

The future of fiat money has always been at stake but this time the danger is largely pronounced. We have seen technology disrupt many sectors. 

I could ask you a simple question: When did you last write a post letter? or when did you last receive one? I could guess its a long time ago unable to remember. Facebook and whatsapp are just at your fingertips. You no more need to stain your favourite shirt with ink or deal with unbearable post men. 

So.Whether you like it or not, Crypto-technology is here and people are embracing it. And it is the future of money. Alot of hedging has already done in the cryptos. This simply means the traditional banking systems need to be creative and adapt. 

Ofcourse, this also means we will see more cryptocurrencies coming up. Forexample, Recently Dubai was talking about lauching their own cryptocurrency. Bitcoin will have more strong competitors. There may be no coin that may beat the bitcoin price, but we will have coins with stronger intrinsic value. Its quite hard to tell which coin will be strongest in a decade to come. 

But all in all cryptotechnology is the future of the money. 

SO WHAT WILL HAPPEN WHEN WE HAVE A CRYPTO SATURATION 

You could guess that, More Investors will run back to precious metals (gold and Silver) to hedge their money. And this is going to happen sooner. 

Personally i would pick more silver than gold. SIlver is more consumed in industries so chances of reduction in reserves greater than Gold and therefore probability of doubling in value are much higher. 

Let me share the gold silver charts below. Will try to explain in a lay mans language, nothing very technical. 

The arrows on the chart show highest high and the lowest since 2011 and 2015 respectively. Both had all time highs in 2011. Gold's alltime highest is $1920.80 per ounce in Sept 2011 and Silver's highest was $49.81 per ounce in April 2011. As i write this now, Silver is at $16.65 an ounce which is around $545 a kilo and Gold is at $1270.10 an ounce.

When investors get more fearful in the cryptos and in major economies, the precious metals will become a preferance. If both Gold and Silver go back to all time highs, investors in Silver will have made more money than Gold hoarders because the price will have doubled more than thrice ( ie $16.65 to $49.81). A simple reason to pick more silver now. 

In conclusion, as time moves on, cryptocurrencies will be the new money worldwide with gold and silver being the hedge to all risks. 

MARKET PATTERNS TO BE AWARE OF ESPECIALLY WHEN ON THE SIDE OF THE MARKET.

GBPUSD SHORT FOLLOWUP WITH TRAILING STOP AND NEW ENTRIES

Every trader has what they call their 'bread and butter' setups. Setups with the highest probability. I specifically trade the 'shock wave pattern', a pattern i will publish soon to avail it to all aggressive traders interested. But when i find my shock wave pattern within the Wolfe wave, it one of my 'bread and butter setups'. Just like the example i shared on my facebook page last year

AnYway, lets get to the main topic now. A wolfe wave is a strong reversal pattern but it can also be a great continuation pattern if it is formed in the corrective move. It is one of those patterns you have to be careful with when it forms especially when you are on the other side of the market. 

Well, it can also be a pattern that you may add to your trading arsenal.  Just like the shock wave, there is strong mass psychology in the wave that makes it one of my favorites. You clearly see  and feel a shift in the sentiment from buyers to sellers and vice versa.  

For those of you who dont know how a typical Wolfe wave looks like: This is how it looks like 

Below are a few examples of the wolfe wave in the market TODAY. Just like many other patterns, it appears on any financial instruments and any time frame.

 Example 1: EURUSD, 1 minute chart

Example 2: GBPJPY, 15 minute chart


This article was triggered by a lot of bulls who were trapped on the GBPUSD last week. The price had rallied up quite well in the previous days until we saw a wolfe wave being confirmed and triggered heavy selling since last Thursday. Ok, Lets look at that more in detail below:

DAILY CHART

The daily price chart shows a nice wolfe formation . And then a great bearish candle that confirmed the sell entry which was a bright red light to the buyers. We are not yet to the target zone, i do think there is more chance for downside despite Trump's 'fire and fury'. 

There is US Produce Price Index (PPI) news coming up at 12:30 GMT. If turns out higher than expected, we may have a swift flow to the down side. 

New entries and trailing stop on the 4- hour time frame.

4-HOUR CHART

The 4-hour time frame shows a small congestion held by the blue trendline. Close below the trendline will give the next sell. If you are selling short term, the first target can be around 1.29304 marked by the red horizontal line X.  

If the momentum stays strong, then  we can take a deeper level support zone around 1.28237 marked S which is my ultimate target. If it confirms as above Stop loss can be place at 1.30300 marked B. 

If you you were already in the short like me here with 90 pips with Sl trailed to 1.30609, you may further move your stop to 1.30300 too after confirmation.

BUT in case the PPI news are released and they not good for the USD, Keep the SL on 1.30609 (price where my trailing SL is now), until price hits X. This is to protect you from the whipsaws caused by news volatility.

When price hits X, you may safely move your stop to 1.30300

HOW TO SET RULES FOR PROFITABLE FOREX AND STOCK TRADING

I have always said and will say it again; Trading is about following your rules, everything else is amateur behaviour. This is part of what i train in trader enhancement.

Your rules should protect you from chasing the market ie early or late entries, protect you from over trading and over risking and keep you calm. In a nutshell, Only your rules put odds on your side.

Guess what, trading with no rules is like jumping into a river infested with crocodiles unable to swim and hoping and praying you will get out alive. Well, you may once survive miraculously, but soon the crocodiles' prayers will also be answered and they will have a tasty meal.

Our overall main objective is to become better traders every single week and make money monthly. One of the sure gauging ways is in our discipline and patience i.e the ability to follow our trading rules. Only and only then can we get a growing positive equity curve

Your rules should be as simple and precise as possible. No room for second guessing yourself or your system. So, lets use one of my trading systems: Shock wave trading system, as an example to show and explain how a simple rules check list should look like.

Shock wave trading system checklist

This checklist is the summary of the shock wave trading rules. Of course you can grow the table to fit the trades you take in a week.

So here is the thing, Summarise your trading system into a simple checklist just like one above. One that even a 5 year old can just check through.Very short and precise to help check your discipline and keep you on track weekly.

Let us look at a few rules in detail;

Just as i mentioned before, your rules should protect your acc and also be able to grow it consistently. In the shock wave system above, Maximum risk is 2%, assuming above acc is $1000, maximum risk on any trade is $20 and since minimum risk reward is 1:2, then minimum profit of any trade on the above acc would be $40. You can adjust the figures to match your account size.

 123.., represents the trades taken on a particular day, so every trade, check to see if you followed all the rules.

The entry rule is clear and emphasized with the word 'ONLY'. This is to protect you from entering too early or too late. Trade what you see not what you are thinking.

Stop Loss (SL) must be objective and technical. Shock wave is momentum strategy and its SL is on the previous congestion high(short)/low(buy). All am saying, is you must have a level where the market invalidates your trade and close out your position with your specified dollar risk.

Rules are there to enforce positive habits required for peak performance as trader. Forexample, journaling every trade is must rule and should be done immediately. Keeping records is one of least attended to yet one most important habits for profitable trading. Therefore making it a rule with help you grow it as a habit. The successful trader you want to become is engraved in your ability to set and religiously follow trading rules.

Its normal not be able to follow the rules all at once in the start weeks but with conscious deliberate effort, the boxes will all be checked right.

Aha, So what do you do every week?

• ·  Thank yourself first for the rules you have so far managed to follow consistently.
• ·   Check the rules where you are inconsistent.
• ·  Pick a rule among the inconsistent ones that you will must follow deliberately the next week until you have managed to follow all the rules.

It can take about 20 to 90 days of trading to be consistent depending on your level of commitment

The main aim of this trader enhancement series, Is to make our trading rules a part of us, just like driving or cooking.

The competition in the market arena is fierce, your only competitive edge are your rules.

Happy trading!

EURJPY WEEKLY TECHNICAL ANALYSIS

MULTI-TIME FRAME ANALYSIS

From our previous analysis here, we can see price ran up as anticipated. Currently price is into the resistance zone and we can clearly see a shift in momentum on the daily chart as it tries to reach for higher highs. The momentum shift can clearly be seen in the channel on the 4- hour time frame as we will see later.

DAILY

The daily price is in small channel, break and close above the channel is likely to land price into an immediate strong resistance zone around 133.600. Daily candle close below the channel may lead price to retest the recent lows around 128.500. Preferably the candle should close below that 21 Simple Moving Average to confirm the recent lows retest.

4-HOUR

The price is into the channel marked by blue trendlines as shown below.  Wait confirmation of candle close above the mid channel trendline to complete the swing to upper end or else it could fail and fall back and gets you trapped. Keep day trading on the lower time frames WITHIN the channel as we wait for a daily candle confirmation for a swing trade move.

GOLD, WEEKLY 

TECHNICAL ANALYSIS

SUPPORT AND RESISTANCE LEVELS

From our previous daily gold analysis here, the price movement was technically beautiful. Being a 4th touch on the daily trendline in our previous article, the trendline break was likely as it fell into the weekly support channel.

Currently we can see a clear congestion zone on the weekly chart, held by horizontal lines R and S. The momentum in the channel is still strong either way, meaning that keeping the trading within the congestion zone now is most logical. 

Whats within the congestion?

Break of that blue trendline to retest the lower weekly support showed some bearish bias. This bias can only be maintained if the price fails to close above the blue horizontal resistance around 1264.8 and falls back strongly back to S or otherwise we will still see indecision. But the momentum too of the bounce off S for the last 2 weeks doesnt agree so much to above statement, it still shows chances of going higher to retest R getting back to the indecision mode.

After congestion...

Depending on the reaction and momentum in the R and S zones holding the congestion, weekly candle close above R may lead to retest of the larger resistance zone marked R1 around 1375.00 which corresponds to the larger monthly congestion resistance.  

Weekly candle close below S may lead to retest of the previous lows support zone around 1129.00 marked S1