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The Tricky Realm of Commentaries

"The Pound Sterling continued its recent climb higher against the U.S. dollar as the main catalyst for the move was better than forecast U.K employment data with the number of people seeking work in the three months through to August," 

- Travelex  Singapore Commentary - 15th October 2009

In the midst of any weak trend, you typically would see statements like these that seem to buck the trend. The [GBP] "continued  its recent climb higher", which makes new traders think that we are in a RALLY! (i.e., climb and continue).

However, the analyst could simply mean that from a 5-min chart point of view, it is a rally, but from a long term picture it is not.

Here's an example:

1) It has to show that it is not merely ranging at the Fib 61.8%

2) Definitive break of next Moving Average.

Tiny, Critical Point

Yet, a new trader who reads this would not be able to differentiate this tiny but critical point.

The new trader will then start to trade LONG GBP in the midst of a clear GBP weakness theme (till otherwise).

There is no way the GBP can go into a powerful strength position now, without at least a sideways, unless it is USD MAJOR Sell-off. (see, trading is all in the details!)

Your trading success depends on understanding all the small differences, and for that you need a proper education that is built from ground-up.

Find out more at a preview near you today: www.forexdrivingschool.com/preview

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Posted via email from Forex Driving School!