GBPUSD: Intraday Technical Analysis (Theory on Numerical Analysis); for October 5, 2012

Use time frame of M15 to determine price range of yesterday, because it is more precise.

Tip: Some traders make a mistake.

The Fibonacci retracement is VALID only if the price moves on daily basis, it should be between the lowest and highest price of that day.

Thursday's historic (4th of October 2012).

Open: 1.6078
High: 1.6203
Low: 1.6073
Close: 1.6192

Function = (High - (High - Low)) * 38%.

The market will indicate a Bullish opportunity on level of: (Low + (Function / 100)) = 1.6134 (-Spread).

Pivot Point (1) = (High + Low + Close) / 3 = 1.6154.

If the price closes below pivot point on the H4 chart, the market will indicate a bearish opportunity on level of 1.6100 (+Spread).

Note: Support at 1.6109

Take Profit Formulas:

Sometimes it seems that the market does not follow our forecast, therefore in order to get out spank from the market before losing your profit you have to calculate the Market Movements.

Market Movements = (High / (High + Low)) * 100

If Market Movements is between 50.20 and 50.40, so you should close your position after 1H:30M (Around 40 pips to 60 pips). If Market Movements is between 50.40 and 50.60, so you should close your position after 3H:15M (Around 80 pips to 120 pips). If Market Movements is between 50.60 and 50.99, so you should close your position after 8H:00M (Around 140 pips to 200 pips).

Apply Formulas:

Market Movements = (1.3530 / (1.3530 + 1.3320)) * 100

Market Movements = 50.20

Note:

It should be noted that there is relation between the Volatility and the Market Movements.

So, let's say you did not close your position after 1H:30M, so after each 15 minutes the Volatility will be decreased "Volatility - (Volatility * 40 / 100)" if you wait more than the trend can go against you at any moment.

Trading Recommendations:

According to previous events, the price has still been trapped between 1.6114 and 1.6222.

Below 1.6104 (23% of Fibonacci retracement levels) look for further upside with 1.6055 and 1.6003 targets. Buy at 1.6134 (50% of Fibonacci retracement levels) with a first target of 1.6213, it might resume to 1.6255.

Technical Levels:

R3: 1.6369
R2: 1.6286
R1: 1.6239
PP: 1.6156
S1: 1.6109
S2: 1.6026
S3: 1.5979

Tools of Chart: It should be noted that the market was so stable and trend was also so clear (upward). Range was: 130 pips (downward). The value of 50% Fibonacci retracement levels is: (High + Low) / 2 = 1.6138. (The key level to confirm a bullish market). Volatility is 209.79, so the market has called for a high volatile.

Observation (s): Please, check out the market volatility before investing, because the sight price may have already been reached and scenarios became invalidated. Use historic prices to determine future prices. Fibonacci retracement is used to determine accurate psychology level of support and resistance, and playing should take into account the period of time. Fibonacci in a range trader (it looks like the trend is trapping and going up or down, if you sell or buy for a long term in this period, sure you will lose your profit.

Warning (s): Stop Loss should NEVER exceed your maximum exposure amounts. The market has a high volatile as usual, if the last day had a huge volatility.