GBP/CAD Ascending Triangle

[Alp]

Weekly chart shows that GBP/CAD has been forming a giant ascending triangle since May 2010. Even though the ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern, there are instances when ascending triangles form as reversal patterns at the end of a downtrend.

The pair had turned north after touching the lower band of the triangle (March 2012). GBP/CAD pulled back to 50% Fibonacci after it hit 1.6200 resistance. Recent price action shows that the pair completed its correction and turned north once again. On weekly chart the price is above the kumo (clouds which we use to determine the trend). However, the pair is still inside the kumo on daily chart, suggesting that there is an ongoing battle between the bulls and the bears. GBP/CAD is trading above the kumo on H4 chart and Tenkan-sen (Conversion Line, which is a nine-day moving average) crossed above Kijun-sen (Base Line, which is a twenty six-day moving average). This is a bullish sign.



1.6080-1.6100 zone is the first hurdle that may slow the bulls’ march. If the pair breaks through, there will be resistance at 1.6236 before the pair tests 1.6390. If the bears successfully defend 1.6100 area and the pair reverses, look for support at 1.6015, 1.5968 and 1.5920. A weekly close below 1.5920 would chance the scenario.

Your thoughts, comments and questions are appreciated!

[Juergen]

Hi Alp,

wellcome here on FMP. Could you tell us a little bit more about your "Entry"-Setup and if your in the trade the stoploss or exit-strategy.

Thx a lot and have fun on FMP
Juergen

[rick21clark]

Hi Alp,

welcome to FMP. I'm only a junior member (about a year now, but a great place to be and very friendly - a great education centre and knowledge resource) and trying to learn everything about FX. Its tough but I find it fascinating.
I have briefly looked at IKh (hope you don't mind me using shortened version but I think I would wear my fingers out trying to type it each time in full!!!) and have a copy of a brief synopsis in my files. Havn't tried it in anger yet as there is so much else to learn but I want to get round to it eventually as looking different systems I think help to get an overall view of FX by looking at it from different directions.

If you have any books or sources to recommend I'd be interested.

Regards Rick Clark (I'm from London by the way - where are you from?)

[abailey]

Hi Alp,

Welcome to FMP. I'm only a little familiar with IKH but I do find it interesting. Hopefully we can combine this with what we have here at FMP to be even more accurate and make many more pips. Again, welcome to the forum and I am sure your time spent here will be enjoyable.

AB

[Alp]

Hi Alp,

wellcome here on FMP. Could you tell us a little bit more about your "Entry"-Setup and if your in the trade the stoploss or exit-strategy.

Thx a lot and have fun on FMP
Juergen

Hi Juergen,
I mainly trade on 4H charts, ie I follow the trend (in my case ichimoku clouds) on 4H charts and I use 30M charts to open new positions.
I only long if the pair is above the clouds (4H chart)
I only short if the pair is below the clouds (4H chart)
and I just wait if the pair is inside the clouds (4H & daily charts)
stop-loss and exit levels usually depend on support-resistance lines. I will try to give some examples later on

[Alp]

Hi Alp,

welcome to FMP. I'm only a junior member (about a year now, but a great place to be and very friendly - a great education centre and knowledge resource) and trying to learn everything about FX. Its tough but I find it fascinating.
I have briefly looked at IKh (hope you don't mind me using shortened version but I think I would wear my fingers out trying to type it each time in full!!!) and have a copy of a brief synopsis in my files. Havn't tried it in anger yet as there is so much else to learn but I want to get round to it eventually as looking different systems I think help to get an overall view of FX by looking at it from different directions.

If you have any books or sources to recommend I'd be interested.

Regards Rick Clark (I'm from London by the way - where are you from?)

Hi Rick,

Glad to hear that you are trying to learn everything about FX, it may take years to master the things you learn but always consider trading as a profession.

You don't have to type ichimoku-kinko-hyo. I usually say ichi or ichimoku for instance

I would recommend "Ichimoku Charts - An introduction to Ichimoku Kinko Clouds" by Nicole Elliott

(I am living in Thailand)

[Alp]

Hi Alp,

Welcome to FMP. I'm only a little familiar with IKH but I do find it interesting. Hopefully we can combine this with what we have here at FMP to be even more accurate and make many more pips. Again, welcome to the forum and I am sure your time spent here will be enjoyable.

AB

Thank you all for this warm welcome. It is nice to be here.

[Barry]

Hello Alp and welcome to FMP

I'm really interested in this strategy and i'd like to ask a question if i may.

If a trade is opened using either a Tenkan-sen / Kijun-sen cross or a Senkou span cross is it better to let the trade run until the cross is reversed on the 4H chart or should exits be made using the S&R lines from the Chinkou span or Senkou span

Thanks a lot

Regards
Barry

[SteveUKTrader]

Hello Alp, this looks a very interesting method - I once looked at it years ago and perhaps you can help me make sense of it!

I'll certainly be reading your posts with interest.

Steve

[Alp]

Hello Alp and welcome to FMP

I'm really interested in this strategy and i'd like to ask a question if i may.

If a trade is opened using either a Tenkan-sen / Kijun-sen cross or a Senkou span cross is it better to let the trade run until the cross is reversed on the 4H chart or should exits be made using the S&R lines from the Chinkou span or Senkou span

Thanks a lot

Regards
Barry

Hello Barry,
I think exiting according ts/ks cross may not be reliable all the time because usually when the pairs break through the cloud (trend reverse), they pull back towards cloud to re-test that s/r levels before they gain momentum. In that case you may exit too early. So a partial close would be better.
However, if it has been a long time since trend reversed and you approach a strong s/r zone, you can watch ts/ks cross to exit.

If you have any other questions please let me know.