EUR/GBP

A follow up on the last EUR/GBP post.


Here is the weekly and pay attention to the last closed candle. It has a range of around 235 points and it closed with around 95 points from its low. Supply has come in because we are at high time frames where the significance in the amount of supply shows up with greater effect. Note, we are taking one candle in isolation and little else on offer on this time frame, it will take another week before we know on this time frame if the bulls are either weak or interested. 

Any clued in trader will know that in order to get the best and cheapest price for your order, you will want to see most of the opposing traders no longer interested in going against you. Banks do this all the time and have the patience to wait, and if needs be, will trade in the other direction in order to get price back to where they can filter orders into the market. This wont be logical to many folks and takes considerable mental effort to get into the logic of pro money.

Daily chart


A much zoomed in daily chart to show you where we closed out the day and week. The 2nd last candle shows it hitting supply and the large spike on top will have trapped a lot of day trader longs. Such stupidity no longer surprises me because it has been like this for over 100 years and greed never ends, until the account ends.

The last candle is where we are now and clearly there is an engulf of the previous days emotional price action. Towards the close there was some buyers came in, but major looking on this time frame. Lets drop down another and see how it looks there.

4hr


This is as far in on the action as I like to get for a reasonable view on where to look next. I have 3 lines showing an area where price will have little difficulty in blowing through, very little in the way of demand is waiting and the next nearest spot is in the candle where I drew a horizontal line through. I expect something to happen there and a higher quality and more buy orders I expect to see at the top of the box on the left lower down. It is still clean and untouched for a long time and price has not been anywhere near it.

There is however one area I have not mentioned. The thick dark blue line is a major S/R area on the high time frames and it is acting as support at the moment. This is where you could see major supply broken and good reason why trading off that line is a bad move. I want to see conviction in the chosen direction and where some testing has happened even if on low time frames to allow one or two nice entries within the London session.

New content

Greetings everyone and many thanks for all your comments recently.

The time is here once again to get more content online and while I know you all crave more information, I detest those who have been collecting my data and selling it without my permission. All content on this blog is exclusive my content and its copyright is protected. If I see more of this selling taking place this blog will end and will be replaced with a paid members only access solution and that comes at a cost to everyone including my time which is more valuable to me than any website.

There are no reproduction rights granted or inferred to anyone to use what is on this blog. Clear enough?...ok lets move on.


EUR/GBP monthly



Back to basics, this is our ten mile high view and from this we want to know what direction price has come from and where it is going to. What we can see is price has come from a high peak back in December of 2008 and has fallen with very deep pull back to the origin of the entire move. 

The lowest thin blue line shows the upper range of the origin and the warning to you is, there is additional room below for price to fall if pro so desires. From this upper part of the range we also see price reacted bullish on two occasions with the most recent rise in price coming into the most near term recent supply as shown with the thick blue line. While it is not yet end of the current month and the last candle yet to close, all we can see is price is willing to push again upwards.

Weekly chart


Useful additional data shows up each time we drop down in a time frame. We see how price pinned the lower part of the supply over head and no major bearish follow through. The week ended with price ending up close to the high range of the weekly candle. 

A little lower I have a thin blue line and this forms the lower range of a new price range that has setup. This range around 250 points and more than ample to become of interest for day trading if we see a fall. The thin line is a place where buyers appeared that were not there in big numbers when price fell to the left on the way down. Useful intel to be aware of.

Daily


With yet more detail we can see that not only is price again into supply, with even more supply over head on higher time frames, it is important to know where buyers would come in if price were to fall and if their buying is enough to not only support price and prevent bears from pushing lower, but if there is enough interest from pro money to break supply in a significant enough way to show us they are bullish and in control. On this chart it is a waiting game with no immediate trade setting up. Unless you trade with crystal clear targets for entry and exits, you only give money to those who are more than willing to take it.

The lower angled blue lines show historic buying, more bullish orders will be hiding in those candles and as yet we dont know the quantum of the force behind them. Time will show us once we are patient.
 
 

4hr


 This is one of my go to charts for trading, it is between long term and short time frames and has clear information most of the time. Over all we can see a range setup that is roughly 230 points wide, that is plenty for day trading and most of you here are day traders. We always look for what I call, room for profit. Unless there are clearly defined and obvious room in one direction and its in tune with higher time frames, then we consider the interest pro will have to be greater than if the room for profit was say 50 points. The point count has no formula or rule, it is a guide to help you make better decisions.

What else can we see, clearly price has been to the bottom of this range twice and on each occasion it moved away quickly indicating there was lots of buy orders waiting there. If price took longer to move away it would show that the interest from the bulls was lack luster.

At 'A' arrowed, we see the most recent significant supply where sellers came in with force and pushed the market hard down to the lower part of the range. We are now at the close back into this supply area and some more information comes our way, take of the move away from supply. We see a lot of buying came in on the 3rd last candle. Ask yourself, if there was so much selling before and price moved away rapidly, and now I see price move away, buy be bought into hard, does this mean new buyers appeared to push price higher?

At this moment the answer is no, what happened is price was prevented from falling and some support came in. This move will have taken out many day trader bears and got others long at the wrong time. The time is wrong because any trade taken there was right into the market close for the week and you do not want to hold forex over a weekend, and ideally not held even over night unless you can handle the games that happen by pro money.

If price were to fall from here there is a box below which is the only point that would interest me. Buyers remain there and with good conviction as indicated by the clean break and swift move up. This plays well into the bigger picture that looks bullish and it also gives me a large room for profit and likely outside of the top of the range. We know this because much of the over head supply has been taken out and those orders for the most part are gone.

1hr


For interests sake I will throw up a 1hr chart and show you what I am looking at. Where price is currently all it tells me is that the price action is terribly chaotic and lots of dumb folks trying to get price to break up or break lower. Logic suggests the best move is lower and back down near the box below. But, if you look at the arrow A, you will see some spiky moves that has taken bullish orders from the box. The candle A is where any sensible longs look most reasonable once we see pro money showing is the way. Any break up from where price is now is a fools game and best left to run until we break supply and find a good place for support to show up.

Ranges are fine to trade is they are wide enough and if there has been a good amount of time since the last tough of the extreme edges. There is nothing to say price has to respect the edges and always keep in mind that the time will come with either side of the range will fail and price will move away from there quickly, aiding in that move and all the stops that get taken out, break out traders who run after price, and new short orders that were waiting below, or in the case of a bullish break, long orders waiting above. I do not advocate break out or chasing trades, its a fools game.

 15min


To drive the point home even more, does the blue line show you enough to say, buyers?....if they appear again it will be in or around the candles shown. Just be wary of the spiky nature of forex and that they can hurt stops if you are not careful and can go deeper into an range in order to get more orders filled.

Food for thought and I hope this is if benefit to you and help you tune your brain and eye to where orders lay.

I cannot take emails looking for comments on charts, it would be a full time job in itself. If some of you really want a private place to discuss trading, I will consider it, but only in a secure, private and considered method.


Be well,


Doc