BarroMetrics Views: Being Open to Market Information

One of the greatest dangers to trading success is myopia: having a fixed mindset of what the market is going to do.

Take a look at Figure 1.

FIGURE 1 GPBUSD 18-day Swing

We see that:

1. We have an 18-d Whole Point Count (9 consecutive days at  below ‘B”). And,
2. We have a confirmed Head and Shoulders Change in Trend Pattern.

Conclusion: the market should head South, right?But because you pay attention, you see that October 12 was a small range day. Now that may be because it was Columbus Day, a holiday in the US, or it may be that the selling is drying up and we are about to head up.

You notice too that a conviction close above 1.5814  will trigger a 5-day Spring  Change in Trend Pattern, and that would mean a line turn in the 18-day.  This would mean a move to 1.6606 (on Oct 12. This price will change - see Nature of Trends) and because the 13-week trend is up, a conviction close above 1.6202 (see Figure 1) would mean an 18-day RePo (buy signal) with a minimum target to the 13-week Primary Sell Zone 1.7042 to 1.6878 (see Figure 2).

So a conviction close above 1.5814 means you need to close out your shorts and go long above 1.5814.

FIGURE 2  13-week GBPUSD

Or you could ignore the market information and believe that the GBPUSD would go down.

Figure 3 has the result.

FIGURE 3 13-week GBPUSD

The point I make is a simple one: keep focused on what the market is telling you and act accordingly.

Ray Barros