Trading In Harmony

The art of looking at a chart to determine patterns and trends is just that… an art. Despite what anybody might tell you, technical chartists have no more power to tell the future than your local tarot reader.

However, when used in conjunction with fundamental analysis, understanding the news, economic data and order flows, it can be a powerful tool to help traders and investors pinpoint their entries and exits and give a good suggestion about where to set your stops and limits.

Today’s Highlights

  • Pounding the Profits
  • Golden Triangle
  • BTC Death Cross

Please note: All data, figures & graphs are valid as of October 25th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Uncertainty surrounding Brexit has never really gone away but at this point, it seems stronger than ever. The questions of if/when/how a general election might happen and if/when/how long an extension will be granted remain unanswered making it very difficult to understand how this will play out.

One thing that seems more certain than just two weeks ago, is the possibility of a hard Brexit or watching the UK “crash out” of the Eurozone. This has been the market’s main fear all along and looking at the Pound Sterling we can certainly see that the markets are now pricing in a much lower chance of this happening.

Here we can see the GBPUSD ever since the referendum. Look closely at that last large push from the floor over the last few weeks.

(Click on image to enlarge)

Now look back at the chart and see if you can recognize some levels that price is reacting to…

…If you spotted the round numbers, then you’re right on the button. 1.25, 1.30, 1.35, and 1.40 have all played critical roles of support and resistance as the Brexit progresses.

(Click on image to enlarge)

The direction might be heavily influenced by political updates and central bank action, but it’s very clear from this that traders have a tendency to gravitate to and respect psychological levels.

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