13 Jun GBP USD Long Term Triangle Update; 12th June 2013
Still no new swing trades unfortunately. In fact, at times I’ve felt like a rabbit in the headlights over the last couple of Weeks while watching huge swings take place across a number of FX pairs, sometimes responding to support and resistance, but other times completely ignoring them. It can be tough when markets go from dull uninteresting trading patterns to full on wild volatility because neither are ideal situations for entering new swing trades, rather, they are more suited to a day trading environment.
But that is the name of the game. Habitually aggressive traders tend to take larger risks and make larger profits, but not many of them stay in the game for very long, but if like me you trade with an extremely low risk outlook, you’ll spend a lot of time sitting on your hands waiting for the right trade to come to you.
Talking of waiting for a trade to come to you, here’s a GBP:USD set-up I mentioned 4 Months ago and even still the idea may fall flat on its face, but its getting very close to decision time now.
Price broke down from a triangle formation that’s been in the making since January 2009. Price is now close to retesting that break down level and this is often an area that can find very powerful resistance.
What’s particularly interesting about this is how the Monthly 20 MA, the triangle itself, a long term 50% fib level, and a short term 61.8% fib level (not shown on this chart) all converge at the same approximate price area of 1.5780
Over the coming days or Weeks I’ll be watching smaller time frames for clues that resistance may be found here with a view to entering a swing short and looking for a continuation of the macro down trend. Of course, the set-up may completely fail, but if this does play out, it could be a big one and with minimal risk: