Today's Analysis of the GBP/USD
Price has broken the daily trend line I had further supporting that we are more likely going into a downtrend or consolidation. Price also struggled for a bit around the 200 EMA after getting to the other side, but has kept on going after breaking that lower trend line. The 200 EMA is not a direct part of what I look at, but is widely used in trading so it is there of note.
Further, price launched through a S/R I had at 1.60206 before stopping at the psych round number of 1.600 where it is at currently. I have a Daily S/R at 1.59678 that has been shown as areas of resistance and support previously when looking to the left. On the H4, price also came close to this level by a few pips around Oct 9th, but not to the pip so this is not a power level.
The EMAs have just crossed to the downside, but with the recent up and down I'm still thinking this is a little more like consolidation than it is getting into a trend. However, at this point I'm waiting to see if price breaks below the S/R at 1.59678, retraces, and if we get some confluence and a candlestick pattern.
PS It is also Friday, so obviously this will not be something that develops this week.
PPS This is no way is to promote a business or any other promotional material, subscriptions, etc. This is just for information purposes only.
How I Trade
The system I use is not one that I developed and I will therefore not take any credit for. It is a system that is disclosed as part of a member group and as such, I will not disclose the details of how the system works in terms of setups, entries, exits, etc. I will just detail my thoughts and actions.
However, I can tell you that it is a system that uses daily and four hour charts (sometimes weekly for a higher view) and is a trend following system. It relies on moving averages, support and resistance, and candlestick patterns.
I will first start by focusing on the pound/dollar, or GBP/USD and will later include analysis on the dollar/swiss USD/CHF as I get more in the groove. My target is to get to about 10 pairs because anymore you need to deal with correlation between multiple pairs. Analysis usually takes about 10-15 minutes per pair, so with 10 pairs I'd be up to about two hours of analysis per day.
As for profit, my target is always 1:2 risk/reward at a minimum with a more ideal target of 1:3. I won't get into all the math, but this requires a much lower success ratio to be profitable. I am also targeting a 60% win ratio.
I'd highly recommend that you investigate the usage of candlestick patterns along with chart formations such as double/tripple tops/bottoms, head and shoulders, and flag patterns.
I'll include some picture references at the end of this post.Credit: http://premium.working-money.com/wm/images/0408images/GujralF7.gif