GBPUSD Review – something for us all to remember

Hi Guys

Well, last week was memorable, the interesting common factor in these market anomalies is that the early warning signs are there in both the technicals and the fundamentals, so although these events are shocking to the market they’re not entirely surprising.

A quick review of last week’s analysis for GBPUSD, which failed to continue higher after breaking above the range.

It’s important to remember that even though your criteria for a market bias may well be met, if there isn’t enough genuine underlying market momentum in your favour, then it’s unlikely to push through.

Strong momentum is what we want when price consolidates before a potential break out in the direction of the trend. This is why it’s preferable to allow price to pullback and test the broken level and confirm it as either support or resistance before considering whether the set-up is valid; the level gives us the where, the right price action signal is our when and how we enter the market.

If I had one criticism of last week’s GBPUSD analysis, it’s this, the close of the 08/16/15 Weekly candle that had just broken above the range, had not quite exceeded the high of the 07/26/15 Weekly candle at 1.5689. In basic terms, bullish momentum was potentially drying up. See Weekly chart below.

 

GBPUSDW230815 REVIEW

 

As I’m sure you’ve noticed markets are a bit of mess at the moment, but I will be posting any charts that start to show clarity.

 

Layla x

Week of 23/08/15 GBPUSD Overview

Hi Guys

I hope you all had a good weekend, here is our first market analysis for the week ahead.

As a general rule, our focus will be on the Dollar pairs, but this is an evolving blog, so in time new elements will be added. Our intention is to give you an overview of each currency’s potential direction bias and horizontal levels. At this stage it won’t be about the specifics of getting into a particular trade, in time that will be addressed separately.

Thank you and have a good week.

Layla.

 

GBPUSD

Since finding soft support (a combination of bounces and breaks) at 1.4600, GBPUSD has formed four higher lows and three higher highs indicating increased buying momentum. We now have a Weekly candle that after five weeks has fractionally pushed above the average Daily range level of 1.5675 (marked in pink) and closed higher at 1.5686.

It would be logical for price to potentially pull back into the Daily 10 MA at approximately 1.5630 before attempting to continue higher, however we can’t rule out a momentum move without a retracement. Either way should bullish sentiment persist GBPUSD’s next potential resistance zone would be a combination of factors consisting of a large cycle (Weekly chart) 50. Fib level, the Weekly 200 MA and a strong level (more bounces than breaks) at 1.5900.

 

GBPUSD Weekly Chart

GBPUSDW230815

 

GBPUSD Daily Chart

GBPUSDD230815

Are You Willing To Learn?

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In this article I hope to draw attention to our subconscious ability to close ourselves off from learning new ideas, but also the importance of keeping open minded towards ideas and information we think we already know.

‘Are you willing to learn?’ It may seem a strange question to ask, as most of us will insist that we are. But this is often based on an impulsive feeling, rather than a considered thought that truly reflects reality. Anyone who has traded before will be familiar with the paradoxical challenge of aligning thought with action and maintaining a neutral, logical, yet alert and flexible mind in the midst of highly emotive circumstances.

I wanted to explore this question after hearing of someone who refused to study anything new about trading; this wasn’t about giving up, but instead he believed it was just a matter of persisting with the information he already had until he succeeded. Although there is sound rationale for persevering with our existing knowledge, particularly in order to refine a strategy, it does strongly rely on our knowledge originating from a reliable source and being fully comprehensive. No amount of persistence can compensate for mediocre information.

It’s unlikely we’ll ever know whether frustration, money spent or human expectation shoehorning reality into a predetermined timeslot was the catalyst for his decision, but it did lead me to consider my own past behaviour. As a newbie trader I made a similar choice and I can honestly say my attitude really held me back. I wasted time believing I could figure it all out on my own, if I was a natural at this then surely I would just intuitively ‘get it’? I was wrong on so many levels. Learning to trade is comparable in skill, to speaking a new language; I’m modestly sure my first baby words were as a result of hearing my mother, without her language skills and experienced guidance I wouldn’t have learnt to speak. Why would trading be any different?

If you recognise the following scenario, you might be trying to learn the hard way; someone demonstrates a better method of doing something, you outwardly accept the advice while inwardly choosing not to follow it. Perhaps a rising sense of annoyance overcomes you, likely stemming from a subconscious belief that you are being deliberately undermined. So even though you hear the words and see the movements you can barely remember anything? That thought and subsequent response denies us the possibility of receiving one vital breakthrough detail, our moment of insight. Furthermore, to have a concept repeated is to have it reaffirmed and clarified. We must learn to appreciate this as an opportunity rather than an irritant we’re trying to ignore.

Fortunately, frustration forced me to take a reality check. If I actually wanted to move forward as a trader then I was going to have to search out the best information and education material I could find. It was a process of trial and error but it was absolutely the only way and the part where I saw the greatest improvement. Ultimately we do have a choice, regardless of whether we actually feel like studying or not.

You may have to actively intervene every time you feel yourself mentally shutting down but eventually it will become an invaluable habit.

Layla

Breaking News: Introducing your new mentors!

Hello everyone,

I hope you are all well. Following on from my previous post, here is a brief video introducing Layla and Chloe, who are the two experienced traders who have kindly offered to take over the running of this blog. It is only a minute or two long, so have a quick look and introduce yourselves to the ladies; You can get to know them a little better from their bios on the ‘about’ page and the Q&A below.

And, now that you have been introduced, you can look forward to some great content, including more regular technical analysis, articles, videos, support and mentoring. I will be following the blog as well.

We have also decided to change the name of the blog – so look out for that shortly!

Q&A with Chloe & Layla

Why did you start trading?

C: To make money. I wanted to change career and have a bigger earning potential and more freedom.

L: Like most people, to make money. I also wanted to change career and increase my earning capacity.

How did you start trading?

C: I attended an initial course, but this was followed up by a lot of self-study and coaching. It certainly wasn’t an easy process.

L: I paid a large sum of money for trading education which promised a great deal but in many ways, failed to deliver. I then pursued an intensive period of investigation and study.

Why do you like trading?

C: It gives me the freedom to do a great deal of things I wouldn’t otherwise be able to do.

L: I can become completely absorbed in chart analysis and lose all sense of time. The process of deciphering symbols and clues appeals to my analytical nature and preoccupation with detail.

What have been the most difficult aspects?

C: Accepting losses as a normal part of trading, and overcoming emotional attachment to money.

L: Thinking I’d nailed it and then realizing there was still more to do in terms of both my technical understanding and in overcoming my psychological weaknesses.

What have you found most useful along your learning journey?

C: I had a fantastic trading coach who helped me immeasurably, both with my technical understanding and psychological development as well as being a motivational and encouraging influence.

L: I too had an exceptional coach who took my extensive but disorganized knowledge and gave it structure, logic and clarity by enforcing concise trade plans and checklists.

What have you discovered about yourself through trading?

C: Trading is a highly emotive process, so will inevitably draw out some less than attractive character traits. However in overcoming these, I discovered resilience, focus, tenacity and an overwhelming desire to succeed.

L: As with any testing experience, providing you can get through it, you will discover positive character traits you didn’t know you had. For this alone, learning to trade has been well worth it.

What do you enjoy most about coaching?

C: I love being able to help people reach their goals.

L: Coaching isn’t easy, but it is exceptionally rewarding when a student ‘gets it’. It also continues my own learning experience.

What are your strengths?

C: I have a thorough and meticulous approach to most things, including analysis. I am also patient and observant.

L: I have a great deal of patience and am naturally curious, so I like to really understand how something works. I enjoy the process of analysis.

What skills from your previous career have been useful in your trading?

C: Having been a scientist, I have a very analytical and methodical approach to trading.

L: Although this might not sound related, my background in art has given me great visual abilities for interpreting charts and market patterns.

What is your trading style?

C: Simple, rules-based and patient.

L: The only way is to use a set of repeatable, uncomplicated rules, these may be on paper but over time they become locked in your mind.

What is your specialism?

C: Trading price action with the trend and timeframe correlation – looking for more specific entries on lower timeframes based on price action setups on the higher timeframes.

L: Trend trading with higher time frame confirmation and price action signals.