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In my last Trading Tutors Newsletter article I set students a challenge to find three reasons for price resistance in the US Dollar/Japanese Yen (FXUSJY in ProfitSource) around the 99 level.
Three or four students emailed in showing the work they had done, which was excellent. I gave those students some feedback and some additional points to watch.
Trading is a challenge to be taken up and conquered, one battle at a time. If I had listed all the reasons the market could have been expected to pull up where it did, most people would have read them, then moved on. The lesson would not be completely learnt or understood.
The students who took up the challenge found the answers – and in doing so, made the lessons real for themselves. For some, the lessons merely filled in a few gaps in their trading knowledge. For others, this was the first time they had performed this kind of analysis. Either way, once you learn a technique, you have it in your trading arsenal for life.
Both WD Gann and David Bowden left clues in their courses for the traders who were willing to put in a little bit of extra work, so keep that in mind as you read them. Don’t be afraid to stop and take some time to follow up a clue or a lead. Chart 1 below shows the market action from the US Dollar/Japanese Yen since my article.
Chart 1
click to enlarge
The high of the Dollar/Yen for the year to date has been 99.67, and while the market hasn’t had much of a pullback from this level just yet, it has been held up at this level for two weeks. This just goes to confirm that this was an important level to watch and perhaps even take profits at.
Once this level is taken out, I would expect the market to move up – but how far?
The next level to watch is around 105 to 106. The challenge is on again – can you find three clear reasons that show resistance around these levels, on this market?
I will be discussing this price level in detail in my upcoming forecasting webinar, but I can tell you now where you can find your answers – in Section 11 of David’s Number One Trading Plan manual.
I’ll finish with a short poem by Henry Wadsworth Longfellow, which Gann quoted in his book “The Truth of the Stocktape”
“The heights by great men reached and kept
Were not attained by single flight,
But they while their companions slept
Were toiling upward in the night.”
Gann didn’t become an overnight success – there were many hours of hard work, preparation and study behind his phenomenal achievements. I honestly believe that anyone can make a success at trading if they apply themselves and do the work.
Be Prepared!
Mathew Barnes
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