Howdy Folks,

I hope you had a great trading week! Today’s post will walk you though a GBP/USD trade that started on Wednesday evening and ended only a few minutes ago. In my FX Street webinars I discuss a trade setup I call a bargain day. These bargain day setups often represent an opportunity to enter with an existing trend at a discounted price. Let’s look at the setup.

The Bargain Day

On Wednesday the market closed below the HMA which was trending higher. This represents a potential bargain day opportunity to get long with the existing trend at a discounted price. Usually I look for a trend trade opportunity and use Fibonacci extensions to calcuate a profit target, but in this case we I knew GBP/USD was dealing with major resistance on the weekly chart so I decided a retracement ratio was in order.

The Entry

Understand I’m a big support and resistance trader, I only use bargain days as a guide to warn me a potential support and resistance trade may exist. I prefer to work along the extreme edges of price but when I can’t do that I have to work with what I have. In this case, the support and resistance landscape was ugly. I decided to split a demand level around support shown last week and the round number of $1.65. The entry was long at $1.6520. For a profit target, I drew Fibonacci retracement ratios from the high preceeding the bargain day to the low. This morning the profit target was just missed. Knowing that GBP/USD is struggling with resistance on the weekly chart I decided to pull the trade for a profit of 131.8 pips.

If you haven’t been able to attend my FX Street webinar I hope this post helps illustrate what a bargain day is, and how I use them.

When is the Next Seminar?

I’ve had to cancel several seminars lately so I am working with FX Street to find a time that works better for everybody involved. Also, I’d like to get the seminar later in the day so people who work a day job can actually attend since they are not recorded. I will post on the blog when the next seminar is coming up so you can register with enough time. Right now, we are looking at 4pm Pacific which hopefully will be a bit better than 12 pm Pacific for folks in the U.S.

Have a great weekend!

Ryan

Howdy Folks,

Our currency of choice, GBP/USD, seems determined to make a run at previous resistance around $1.70. Today’s price action poked $1.66 and found enough demand to drive prices above $1.67 again. The immediate price trend as measured by my trusty HMA appears to be intact and poised to move higher, but entering now is too expensive for me. I’m cheap and I like a good deal. I’d prefer to see price closing against the prevailing price action trend as I have regularly discussed in my webinars on FX Street. The daily price is currently above the HMA while trending higher along the Bollinger Band median (20 SMA) on a lower time frame (4 hour). Not surprisingly, the market isn’t at an extreme of overbought or oversold as measured by the CCI oscillator. Without a dirt cheap entry price I’ll be out of this currency pair tonight. After the news is released tomorrow morning, it wouldn’t surprise me if $1.66 or $1.6650 is jabbed one more time before a move higher. If $1.66 falls however, the weekly resistance we talked about yesterday may be setting up for a move lower.

Charts below…

More thoughts tomorrow evening, best of luck to you intraday players!

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

Howdy Folks,

I have a schedule conflict this week so there will be no webinar today. I have rescheduled the webinar for Friday, the 6th at 20GMT which is 3pm Eastern Time. If you would like to attend, please visit this link and regsiter:

http://www.fxstreet.com/live/sessions/session.aspx?id=aba67ad4-5fea-4b6a-8f46-bbdadb68be7f

Hope to see you there!
Ryan

Howdy Folks,

We had a great webinar earlier today, I hope you are able to attend next week. We are do  them every Monday, I’ll post the link on Friday. GBP/USD was stopped short at supply and sold off like a politician running from the truth on Friday. The currency looks like it is on its way to test breakout resistance as support near $1.61. Nothing specific to zero in on today, GBP/USD is running in the middle of the range, perhaps something better will appear tomorrow.

Howdy Folks,

October has not been kind with my schedule and webinars! Last week I had some internet issues before the webinar and this week I have a schedule conflict so there will be no webinar today. We will resume on the 26th of October.

Thanks,

Ryan

Howdy Folks,

There were no decent bargain day opportunities this week however patience with the GBP/USD paid off late in the week. On Monday I posted a chart which marked a range between $1.61 and $1.58. Given recent price action my bias was to short the top of this channel near $1.61 and that is exactly what I did.  I suspected nothing dramatic would happen on GBP/USD until after the BoE rate statement Thursday morning. The immediate result was a GBP rally but I didn’t believe it had any teeth because the BoE didn’t throw any surprises as the RBA did earlier in this week. I setup a classic support and resistance trade using broken support and the round number $1.6100. I sold GBP/USD at $1.6110 using entry orders. My profit target was the 61.8% ratio and I took 190 pips off this morning. There was more in this trade but a profit target is a profit target.

I hope you had a great trading week!

Don’t forget Monday’s webinar! You can register at this link by clicking on “Register for this Session”

http://www.fxstreet.com/live/sessions/session.aspx?id=9f2cb6df-bd6e-465e-9b5f-9763e8c3a86b

Have a great weekend!

Ryan

Howdy Folks,

Another great webinar this afternoon! If you missed it the next one is Monday at 19:00 GMT as usual. GBP/USD is rather boring to talk about tonight. The market appears to be waiting on data from the manufacturing sector and Halifax’s HPI report tomorrow morning. The pair continues to range between $1.6100 and $1.5800 with $1.6000 smack in the middle. With no bargain day and little price action there isn’t much to do with this pair today. Range traders will likley continue playing both sides until we finally get some direction out of this pair. Nothing for me to do right now except let time pass and see what happens. Thinking out loud for a momement, it might be interesting to see a bargain day setup near the bottom of this range. Don’t forget the BoE releases their rate statement Thursday morning.

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

Howdy Folks,

We had some scheduling and technical issues on Monday that ended up canceling our weekly webinar. I apologize to anyone who wasn’t able to attend. I’ve been out this week so the blog is a bit quite, I’ll be back next week to get caught up.  There is no webinar on the 21st, I have a schedule conflict.

Have a great weekend!

-Ryan

Howdy Folks,

Well it figures the first bargain day I get to talk about on this blog ends up a looser. Overnight $1.64 turned out to be the round number of choice as GBP/USD rallied straight through the highs of the last few days overnight. I had a feeling this bargain day could end being a two day rally after all the GBP/USD selling but hindsight is always profitable eh? I had a small short at $1.6330 and lost on that one, it happens. On to looking for the next opportunity. To you GBP/USD longs, nice work but don’t worry, I’ll get my money back from you on the next one! 

-Ryan