Thursday 18th September

Thanks to all those that e-mailed in with the explanation for Cable:

“Foreign Exchange jargon for the UK Pound v US Dollar exchange rate. Alludes to the cable laid under the Atlantic, which linked the tickertape machines in New York and London.”

The GBP/USD was the first currency pair that could be traded 24 hours a day, due to the cable under the Atlantic.  Back in the days of ticker tapes (and Wall Street crashes, maybe) sterling and the dollar would have been the world’s two strongest currencies, making it worthwhile to lay a cable for the explicit purpose of trading the two.

Back to today and I had a losing trade this morning on the Barclays feed costing my maximum of 35 pips. It only showed on the Barclays 5 and 10 minute charts but it was a qualifying trade.

Shortly afterwards there was a potential short trade that showed up on all nine of my charts, so all feeds and all time frames, which I suppose makes it a confident trade and had I entered on the 5 minute chart I would have made 30 odd pips. But it was 22 pips away on the 10 minute chart so not a qualifying trade (and even if I had taken it I’d have only made a few pips after the spread anyway).

I’ve noticed a potential problem with using the 15 minute chart too. The difference in entry point between the 5 and 15 minute charts can be huge. I was watching a potential long trade that had a qualified PTP on the 5 minute chart at 1.8164 yet the entry point on the 15 minute chart was 1.8264. So thats 100 pips difference. If the market has moved 100 pips already to get the 15 minute chart qualified, whats the chance of it moving any further? Also, with the 15 minute chart, it’ll take 45 minutes before it becomes ‘unqualified’ and disappears so you are looking at a big time difference between the 5 and 15 minute qualifying times.

So I think for the 15 minute chart we need to consider it only if the figures are ‘roughly’ the same. By that I mean, if the 5 minute chart is suggesting a stop of 30 pips, and the 10 minute chart saying something like, 35 or 40 then the 15 minute should be roughly the same and not 50 or 60 otherwise it’s too far out and definitely not worth using as a qualifier. So I wouldn’t consider entering a trade if it was just showing on the 5 minute chart and the 15 minute chart if the entry point was more than 15 pips away, the same as with the 5 minute and 10 minute charts, otherwise the market has moved too much already.

I will monitor how the 15 minute chart performs over the next week or so anyway.