Kreslik.com - traders community since 2006

Little bit of Background:
I use Tradestation and I trade only EUR-USD and GBP-USD, I use NORMALIZER 8.1 with xaverage- RSI2 as my main indicators to confirm I use CCI AVE and STOCHASTIC 14. I use SHME DYNAMIC SR for resistance and support.
My daily indicator begun showing me that at 1.9932 4/16 GBP was overbought, my weekly and monthly are pretty much up there since then it when to a high of 2.076. So what is the big deal....??? After all, like the big gurus are saying we are in up trend. That is all true until GBP decide to come down, and that is where I need the help to understand what others in this forum are seeing.
We hit the highest point since June 1981, when I analyze in a monthly base I notice that almost every time we hit a high point our explosive GBP retrace fast and deep like it does in any time frame.
So, let us take February 91 ---5 month and 3875 pips down.
September 1992 ----- 6 month and 8560 pips down.
Now, I'm trying to analyze what happened in those months in a day by day base but unfortunately I can't go that far with Tradestation.
I don't know were to find news about what precipitate these deeps, if any body can help on this I will apreciate the effort.

Luschile, I can help you with Septembe 1992

Do a search on George Soros (the man who brought down the Bank of England)!

I don't believe the circumstances are even close to being the same However, it will be time well spent as the story is a cliffhanger.

...and since we're all on the path to enlightenment, there's a series of articles here that could offer a perspective.

1981 was a peak in oil prices and the US drove down the dollar the only thing we are missing is paul volker running the fed and pushing up intrest rates to crush the inflation. but hay, the us goverment says we dont really have that much inflation in the core cpi (save oil) on a basket of products that people havent bought as staples in 30 years. instead of looking at the cost of butter they need to look at the cost of fast food and eating out for household inflation.

sorry about that, im really not a doom and glummer type of guy.

airball

Luischile

Per ReGO, definitely look up Soros. On September 16, 1992, George made over one billion dollars, one source said 1.2 billion. Either is a grand sum. He was shorting the GBP while the Bank of England was propping it up and blew out their reserves. The pound and England were out of the European Common Market while Soros made a trillion and history.

Patch the Pirate
In VA

Thanks for your help, it seems that those circumstances were pretty much exceptions to ?normal? trading. I know GPD can run 800 points pretty easy but I do not expect a huge deep, even though I?m short in GPD and the EUR a while now. For now I hope for a moderate retrace so thing don?t get out of hand.

In the other hand Gert Frobe indicate a some how similar situation in relation of oil price and always the posibility that the fed decide to go ahead with interest rate (moving up).
I guess Caution with Longs positions is in order for the next few months.