Comment by Haitham653 on April 21, 2012 at 9:36am

Hello naivetrader1

I think the USD will rise in the first week of May , It won't make that big rise but I think it will keep ranging with some bullish momentum , but the big rise for USD may happen in Sept or Oct 2012..

Comment by naivetrader1 on April 21, 2012 at 9:41am

Thanks for that. I'm sure this week wd be interesting, as mentioned in ur earlier post!

Comment by Haitham653 on April 21, 2012 at 9:42am

Any rise for RSI is normal , but If the daily RSI - currently 65 -  breaks above 70 , that would suggest more gains for topping, but I think 1.6160/200 is unbreakable ?!! 

Comment by Peter jcp on April 21, 2012 at 11:13am

Hi Haitham - I got caught out on a longer term swing trade on the pound in mid 2008 - to early 2009 - mainly depending too much on the RSI. It is still on of my favourite indicators and I use it most days on frames from 10 minutes to monthly ( on different settings) - but a word of warning on it - our chart indicators are just not that accurate - more like a faulty speedo on a 1960 Ford Bronco than the precision now available in cars via GPS and radar :- )

I have tried RSI on 4 different chart packages including Pro Intellicharts - and even there readings can differ by over 10% -15% - at same price levels.

In my case the GU had fallen in mid 2008 and around the 1.7500 level was looking for buys. My monthly had bottomed - my weekly was way over sold and on certain days we got small pullbacks.

However and to cut a long story short my RS1 stayed around the 0 level on the monthly for about 6 months whilst the pair dropped another 4000+ pips - yes 4000 + pips to 1.3501.

Luckily - being more of a short term intradayer I did not stay in my buy at 1.7000 levels - even though every week I kept thinking it will turn and go back up 500-1000+ pips,

Finally 7 month later than I had originally thought - the GU bottomed and for the next 5 months went back up.

It was also a lesson for me in trading - never think the market cannot do anything - nowadays nothing surprises me and i do worry about traders who dont use stops thinking - it does not matter - over time it will come back. I can imagine there are traders still from 2009 with sells at 1.4000 area on the GU still waiting 4 years later for it get there again - ( unless they have been margin called)  :-)

Have a great week and a brilliant May - regards Peter

Comment by Haitham653 on April 21, 2012 at 2:32pm

Hello Peter and thanks 4  your comments..

I have learned 2 facts about forex market,
1- History repeats itself.
2- Forex is a game of odds ( probabilities ).

If you know how to play it right, then you'll be on the safe side over 70%..

that simple...

Best Regards...

Comment by Haitham653 on April 21, 2012 at 5:55pm

Hi Peter , forget to add one more thing , there are too many ways of using RSI, If you were looking for overbought and oversold , that would work in range market , not in trending market ..

In 2008 , according to daily RSI , we had strong bearish trend , after the top was confirmed by daily RSI at 1.8666, the pair declined over 4000 pips in matter of few months....

Comment by Haitham653 on April 21, 2012 at 6:10pm

Now , GBPUSD is in extended bearish divergence on daily , this is bullish reversal in short term suggests more gains before possible topping , once the daily RSI breaks below 30 , the last high would be confirmed as a top, then strong bearish move is expected ...

but the smart question is ?!! where the pair is gonna top !!!!!!!

Comment by Haitham653 on April 21, 2012 at 6:31pm

Hint: the weekly RSI is so close from 60 level - currently 58.82 - I think once It hits 60 , strong bearish move is expected ...500 / 1000 pips !!!!

Comment by naivetrader1 on April 21, 2012 at 6:37pm

Apparently the paradox is the Cable is being backed by strong economic data, even the GDP (on Wed) might be a bit better ..... Would it need something special for such a sharp decline?

Comment by Peter jcp on April 21, 2012 at 7:08pm

Hi Haitham - yes - what caught me out was the daily and weekly RSI's were actually adjusting with the flows of 100-300 pips ups and down - but my monthly RSI seemed as though it "flat- lined"  at 0 - ( and below) for so many months- and at the time that was therefore "swaying" my bias that the big down trend would stop - any day or week and go into a range - before going back up.

Still it was a good lesson to learn- and as we know - like you say - it is a game of probabilities and so we will never be 100% correct in all our trades.

Comment

• ‹ Previous
• 1
• 2
• 3
• Next ›
• Page