i have sold G/U @ 1.9272 with stop 2.0152 and target 1.8518.
2.0194-1.9569=0.0625
1.9510-0.0625=1.8885(target point)
Hi Hina, nice call on the cable... There's a Head and Shoulders pattern on the GBPUSD Weekly
chart, which is giving us a minimum target of 1.8885. We can call it the ''Surgical Dissection Of the Left Shoulder''.
Price might still get way down to your target of 1.8518 since it is a lil below the 60% BUY
WINDOW,technical analysiswise. Remember, since this trade is being taken off the weekly(higher term chart), it is logical that it would take more time to get fulfilled. Next week would unfold the mystery...Lets keep our fingers
crossed,shall we?
This is an excerpt from Trading in the Zone by top trading pyschologist, Mark Schwager, who's one of the best in the business. Most traders might be skeptical about market pyschologists by I still believe they have lots to contribute in the trading pyschology realm. Here are his views:
MARKETS MOST FUNDAMENTAL
CHARACTERISTIC
(IT CAN EXPRESS ITSELF IN AN ALMOST INFINITE
COMBINATION OF WAYS )
The market can do virtually anything at any time. This seems obvious
enough, especially for anybody who has experienced a market that
has displayed erratic and volatile price swings. The problem is that all
of us have the tendency to take this characteristic for granted, in ways
that cause us to make the most fundamental trading errors over and
over again. The fact is that if traders really believed that anything
could happen at any time, there would be considerably fewer losers
and more consistent winners.
How do we know that virtually anything can happen? This fact
is easy to establish. All we have to do is dissect the market into its
component parts and look at how the parts operate. The most fundamental
component of any market is its traders. Individual traders act
as a force on prices, making them move by either bidding a price up
or offering it lower.
Why do traders bid a price up or offer it lower? To answer this
question we have to establish the reasons why people trade. There
are many reasons and purposes behind a person s motivation to trade
in any given market. However, for the purposes of this illustration, we
don't have to know all the underlying reasons that compel any individual
trader to act because ultimately they all boil down to one reason
and one purpose: to make money.
We know this because there are only two things a trader can do (buy and sell) and there are only two possible outcomes for every trade (profit or loss).
Therefore, I think we can safely assume that regardless of one's
reasons for trading, the bottom line is that everyone is looking for the
same outcome: Profits. And there are only two ways to create those
profits: Either buy low and sell high, or sell high and buy low.
If we
assume that everyone wants to make money, then there's only one
reason why any trader would bid a price up to the next highest level:
because he believes he can sell whatever he's buying at a higher price
at some point in the future. The same is true for the trader who's willing
to sell something at a price that is less than the last posted price
(offer a market lower). He does it because he believes he can buy
back whatever he's selling at a lower price at some point in the future.
The underlying dynamics of market behavior are quite simple.
Only three primary forces exist in any market: traders who believe
the price is low, traders who believe the price is high, and traders who
are watching and waiting to make up their minds about whether the
price is low or high.
Technically, the third group constitutes a potential
force. The reasons that support any given traders belief that
something is high or low are usually irrelevant, because most people
who trade act in an undisciplined, unorganized, haphazard, and ran-dom manner. So, their reasons wouldn't necessarily help anyone gain
a better understanding of what is going on.
But, understanding what's going on isn't that difficult, if you
remember that all price movement or lack of movement is a function
of the relative balance or imbalance between two primary forces:
traders who believe the price is going up, and traders who believe the
price is going down. If there's balance between the two groups, prices
will stagnate, because each side will absorb the force of the other
side's actions. If there is an imbalance, prices will move in the direction
of the greater force, or the traders who have the stronger convictions
in their beliefs about in what direction the price is going.
Now, I want you to ask yourself, what's going to stop virtually
anything from happening at any time, other than exchange-imposed
limits on price movement. There's nothing to stop the price of an
issue from going as high or low as whatever some trader in the world
believes is possible—if, of course, the trader is willing to act on that
belief. So the range of the market's behavior in its collective form is
limited only by the most extreme beliefs about what is high and what
is low held by any given individual participating in that market. I
think the implications are self-evident: There can be an extreme
diversity of beliefs present in any given market in any given moment,
making virtually anything possible.
When we look at the market from this perspective, it's easy to
see that every potential trader who is willing to express his belief
about the future becomes a market variable. On a more personal
level, this means that it only takes one other trader, anywhere in the
world, to negate the positive potential of your trade. Put another way,
it takes only one other trader to negate what you believe about what
is high or what is low. That's all, only one!
The point is that from our own individual perspective as
observers of the market, anything can happen, and it takes only one
trader to do it. This is the hard, cold reality of trading that only the very
best traders have embraced and accepted with no internal conflict.
How do I know this? Because only the best traders consistently predefine
their risks before entering a trade. Only the best traders cut
their losses without reservation or hesitation when the market tells
them the trade isn't working. And only the best traders have an organized,
systematic, money-management regimen for taking profits when
the market goes in the direction of their trade.
Not predefining your risk, not cutting your losses, or not systematically
taking profits are three of the most common—and usually the
most costly—trading errors you can make. Only the best traders have
eliminated these errors from their trading. At some point in their
careers, they learned to believe without a shred of doubt that anything
can happen, and to always account for what they don't know, for the
unexpected.
The
typical trader doesn't predefine his risk, cut his losses, or systematically
take profits because the typical trader doesn't believe it's necessary.
The only reason why he would believe it isn't necessary is that
he believes he already knows what's going to happen next, based on
what he perceives is happening in any given "now moment." If he
already knows, then there's really no reason to adhere to these principles.
Believing, assuming, or thinking that "he knows" will be the
cause of virtually eveiy trading error he has the potential to make
(with the exception of those errors that are the result of not believing
that he deserves the money).
What the typical trader doesn't realize is that he needs an inner
mechanism, in the form of some powerful beliefs, that virtually compels
him to perceive the market from a perspective that is always
expanding with greater and greater degrees of clarity, and also compels
him always act appropriately, given the psychological conditions
and the nature of price movement. The most effective and functional
trading belief that he can acquire is "anything can happen."
