Pound Dollar - Daily Candle Chart 27th February 2009

Pound Dollar - Daily Candle Chart 27th February 2009

Having just updated the euro vs dollar daily chart, the same advice applies here to the GBP/USD currency pair, and that is simply to stay out, until we see the current consolidation come to an end. There are ways to trade these markets, but as retail traders, using the simply buy and sell order strategy will loose your trading capital very quickly, as the daily whipsaw action takes out your stops as you chase the market, first one way and then the other. It is possible trade such moves very effectively but you will need to learn how to use currency options in a straddle strategy, or alternatively ( and more simply ) a fixed odds approach using a ‘no touch’ trade where you believe certain prices will not be achieved in a certain time frame. Both of these strategies are perfectly valid for trading in such conditions, whereas I’m afraid the simple buy and sell strategy is not, purely because it is too simple for such a volatile and unpredictable market. So please have a read of the post on the euro vs dollar site which I hope gives more detailed explanation. My advice is therefore to STAY OUT, until further notice, and be patient. We will see a reversal or clear signal, we just have to wait.

The fundamental news for today is in the US this afternoon and I have covered this for you on the euro to dollar site as there is no UK fundamental news out today of any note.