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Learn How To Trade - Trapped Traders® Daily Analysis - Selling GBP/USD

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Get Mark Chapman's Free Trapped Traders Calls and Learn How To Trade - Click here: http://mytotalsupport.com/cpv/base.php?c=119&key=c335fd1ebae1ef722be28559d78941b3&ls=youtube&keyword=learn_how_to_trade&ad=nBgqlXv9U5U We’re going to take a look at the GBPUSD today. Fundamentally, we know what’s happening in this pair. You want to be buying USDs even though the USD had weak sentiment surrounding it for the last month or so. That doesn’t detract from the fact that the USD is the fundamentally strong currency pair out there. The GBP, on the other hand, is fundamentally weak and we’re heading into our Brexit negotiations now. Much anticipated. So, the likelihood of continued uncertainty in the UK, plus geopolitically from a political perspective, the UK itself is in a state of flux due to a hung Parliament. But the conservative government have the majority, but they don’t have enough to form a government and therefore they’re having to go into business with the DUP, Northern Irish political party. However, that deal has not been done. The election was a couple of weeks ago now. Apparently they are asking of some fairly hefty figures in terms of investment in Northern Ireland, so that deal is yet to be struck. So, again, just continued weakness as far as that’s concerned. Geopolitically, the uncertainty surround Brexit continues. Obviously the same applies in Europe as well. So, taking a look at the GBPUSD this morning, it looks like there’s some USD strength across the board. And I just want to highlight this area here. And this is obviously an area where you will have traders trading off these levels, going long, believing that the market will continue up. And if you just check out the market prior to this move, one of the most important things about understanding how markets end up trapping traders on the wrong side of them is the context of the market prior to the trap occurring. So, if you have a look at this context, meaning what was the market doing prior to the trap. And if you look at the nature of these moves up, they get kind of more strong and vertical and large in nature as the price continues. And then what we have at the top edge is you then get some profit taking that forms a level of resistance as it moves forward. A little bit more resistance at the level there. But then it breaks up through the level and then traders look to trade the retracement, and that’s what they get. They get the bounce off that level. So, interestingly, what they will do from there is they’ll place stops under there or place stops under this area here, being the most recent sort of big buildup of structure. Now, if you take that into consideration, then what we have is traders who went up long in here, believing it would follow through, they are now trapped. So, let me just clear this up. So, there’s your level there. So, there’s a couple of things going on. Traders drawn into that breakout at those highs as well. So, breakout momentum traders went long. Retracement traders traded the pullback into prior resistance that now becomes support in their view. That’s the very typical narrative that’s spouted online and in the financial world, and then you’ve got stops under here as well. This is probably a 60 percent fib. Let me just have a look just to add insult to injury from this original move. There you go. There about. So, there you go. And look at how it reacted as well. You’ve got a bit of a level in there as well. Sorry I missed that. A little bit of resistance. So, comes in, breaks, comes back into the 61, and then it absolutely flies from there. Just think about the context of that. That candle. Look at the wick. That candle was heading north big time and that would’ve drawn a lot of traders in. Again, very typical place for them to place their stops would’ve been below this structure or below in here, and they are being creamed. So, not only are those breakout traders at the top being creamed. Not only are those break pullback traders being creamed. The 61 percent fib traders into a little bit of structure have also been creamed. Net-net the market is very long from last week. This looks like a pretty good place, if we get a pullback, to take a short. https://www.youtube.com/watch?v=nBgqlXv9U5U Disclaimer: This video is for general information only and is not intended to provide trading or investment advice or personal recommendations. Any information relating to past performance of an investment does not necessarily guarantee future performance. Forex Traders Daily including its analysts shall not be responsible for any loss that you incur, either directly or indirectly, arising from any investment based on any information in this video. Please remember derivatives and FX spot carries significant risks and may not be suitable for all investors. Losses can exceed your deposits.
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Text Comments (2)
Mark Jackson (1 year ago)
Great analysis on the lower timeframes - helping me confirm the D1 lower low lower high pattern that seems to be establishing itself...
Market Traders Daily (1 year ago)
Thanks Mark!

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