I posted a GBP/USD swing short last week and here’s the follow up as of this (Monday)…

The 30 minute set up remains the same as it was with perhaps a little more transition to the Wave as prices congest within the middle and bottom lines of the Wave.  As prices are still plotting below and within the 34ema close and 34ema low, the 30 minute chart a bearish to neutral.  Transitional markets are tricky since the validity for the swing short relies on the four to six o’clock angle of the Wave!

Prices are staying below two important levels on the 30.  First is the top line of the Wave because this dynamic level represents the validity point and the stop loss for the swing short…add five pips to it and that’s your stop.

The second level to watch is the 61.8 Fibo.

These two levels together should make for a fairly formidable ceiling but if the transitional look of this timeframe isn’t doing it for you, take a look at the 60.

The 60 minute chart tells a better swing short story this morning as the downtrend is still very much in place as shown by the clock angle of the Wave.  The bottom line (and short trigger) on this chart is currently at 1.6137.  Remember that the Wave is dynamic resistance in a downtrend.

As usual on my MT4, I have my (free) GRaB plug which you can download from my site and I am still playing around with a plug-in that I bought to test some ideas about trends, trend following and how I set up swing trades over the Summer doldrums.  You can read about over at my blog.

The 30 minute cable is bouncing (correcting) to the 34ema low (bottom line of the Wave).  The 34ema low is currently at 1.6212 but prices have not had any problem slicing and dicing through the “00″.

The 15 minute chart is transitioning to more of a sideways market cycle so this it’s unlikely that ay follow-through will be seen as London and Frankfurt are already closed.  Th two lows to watch will be the 1.6153 and 1.6155 levels.

the cool thing about a 15 minute chart is after you’ve watched a sell-off that a) you were not in or b) you have already scaled out of…that 15 minute chart is usually there to give you the first chance at a new opportunity.

I have been making exceptions with timeframes — like this 240 minute GBP/USD — which are in a trending cycle.

I’ve drawn the Fibo levels on this chart and here’s a look at my GRaB plug-in (it’s free and available over at my blog) showing that the trend is currently down.

The candles are plottig red, trading below the bottom line of the Wave, and most importantly, the Wave is heading down at a four to six o’clock angle.

I’m looking to capitalize on a swing short as prices rally into either the 38.2 Fibo (more agressive entry short) or the 50% Fibo which is also where the bottom line of my Wave is (more conservative and my personal preference).

If this trigger is hit, one the way down I’ll be looking to these same Fibo levels which will now be support for potential profit targets.

Yes I’m having some fun but I don’t want to abandon our discussion here because the 240 minute USD/JPY did indeed transition to a sideways market cycle for a momentum set up and broke out.

Here’s the momo set up after the Wave finished leveling out to a sideways three o’clock angle.

I circled the MACD Histogram which is my confirmation tools for the breakout which is also circled.  Price broke up through the resistance of the downtrend line triggering the momo.

The swing short from the previous downtrend got stopped out as prices pierced the top line of the Wave.  The Wave then proceeded to flatten and trigger the momo.  NOW we have a uptrending market cycle and I’m magaing my momo and looking for corrections to play the swings once again…only now they’re swing buys in the uptrend.

part two of the forex market pulse - futures connection and how to incorporate it into your trading.

part one of the forex market pulse - futures connection and how to incorporate it into your trading.

I get into the details of my core set ups as well as address some trading examples…

Here’s the playback.  It’s fairly detailed and runs around 40 minutes.

I updated my Twitter yesterday which I believe is called “tweeting”.  My tweet was:

“Cable bouncing off 34EMA high (top line of Wave) for swing trade. Psych level support at 1.5000 - low was 1.4995.”

There was also a chart that accompanied that update.  You can check it all out here.

I received a lot of emails which actually caught me by surprise since my swing trades are discussed here with some regularity but then I thought, well why not share the process for this type of set up.  I am going to share my MT4 chart set up here.

So here’s a short of what I call the “quad view”.

These are all 240 minute charts since that was the time frame that I set the swing up on.  I also have my GRaB plug in action on the lower left chart and the OsMA and CCI on the lower right chart.

The 240 time frame was perfect for the swing becasue the Wave clock angle was what I call “12 to 2″ which means it was in an uptrending market cycle.  In an uptrend it’s my job to identify pullbacks that I could look to set up buys from in order to follow the trend…which is up.  The entry may be contrarian because I am buying into short term weakness but it’s a trend following trade.  The only time I was buy the dips is in a uptrend.  (Conversely, I look to sell the rips in an downtrend.)