Daily FOREX Prediction, 2020-05-11 Monday

USDJPY:

I hope everyone read my prediction on 2020–05–10 Sunday, in which I advised to start BUYING. If you look at USDJPY H4 right now,

• The length of Wave 1 and the length of Wave 5 demonstrate 1.618 Fibonacci Ratio.
• The Key Resistance Line (107.50, the start of DOWN Wave 5) is broken UP.

Those two facts indicate that the bigger (higher degree) DOWN Wave (encompassing Wave 1 to Wave 5) is done, and a new UP Wave 1 started in 2020–05–06.

If you were able to catch the UP Wave yesterday, very good job (currently, I have +85 PIPs). But, the party is far from over. We need to answer the following FOUR questions:

1. When will the current UP Wave 1 in H4 end?
2. Is UP Wave 1 the very beginning of a higher degree UP Wave?
3. OR is UP Wave 1 still a part of a higher degree DOWN Wave?
4. In the worst case, the new UP Wave 1 will end in 10 sec, and the market will PLUMMET DOWN to STOP-LOSS. Am I prepared?

Anything can happen at any time in a market. You MUST anticipate everything and be prepared. Always be HUMBLE and open-minded.

To answer Question 1, I need to look at H1 Chart and dissect Waves.

To answer Question 2 and 3, I need to look at D1 Chart.

To answer Question 4, yes I am ready (are you guys ready?). I will lose my +85 PIPs, but it will give me a value info about new wave formations. If this case happens, a much higher degree UP Wave will likely to start in near future.

Now, let’s look at H1 Chart and try to answer Question 1:

In H1 Chart, a potential wave count of Wave 1, 2, and 3 are present. But, I don’t see any Fibonacci Ratio OR local Support/Resistance Break to validate the wave count. More info needed.

In such situations, it is best to keep Stop Losses tight (106.20) and let WINNING trades CONTINUE. Even if your Stop Losses are hit, it will give you valuable info.

Simply, successful traders become OPTIMISTIC when they see GREENS and PESSIMISTIC when they see REDs. Can you guys guess when UNSUCCESSFUL traders become optimistic (just a clue, HOPE is for HOPELESS)?

Now, let’s consider Question 2 and 3 in D1 Chart:

The market has TWO main options to unfold, and those options were already discussed in the yesterday’s prediction. But, I will also mention here for new readers.

• Option 1:

If this option is true, the new UP Wave in H4 will end soon (or just ended, which will answer Question 4), and a DOWN Wave E will begin.

You guys might be wondering “How to identify this option? How is it different from other options? Every option seems to go up and down. Exactly How?”.

In Wave Theory, 5 (sometimes 7) consecutive Waves of the same degree must present at least one Fibonacci Ratio, and the start and the end of each wave makes a very strong Support/Resistance Lines.

How the market reacts to the Key Resistance line 109.40 and the length of Wave B and the potential Wave D will validate this option. If the market goes DOWN by breaking the H1 supports of Wave D before breaking UP the Resistance line 109.40, it will confirm this option.

We will have a decent opportunity to SELL on Wave E.

• Option 2:

This option implies that the UP Wave in H4 is the beginning of a higher degree UP Wave. Thus, it must break UP the Key Resistance Line 109.40.

Final Thoughts on USDJPY:

• Considering H1 and H4 Wave formations, BUY USDJPY with STOP LOSS 106.20.
• Pay close attention to how the market reacts to Key Resistance Line 109.40. Look for Fibonacci Ratios. They are the keys to validate Wave counts.
• If the supports of UP Wave in H1 is broken DOWN, get out. But, be ready to go back to BUYING.
• Cut the LOSERS and let the WINNERS go.
• I will NOT recommend SELLING for now.

GBPUSD:

If we are lucky, we might win big by selling GBPUSD. WRONG!!!!, we will never trust LUCK but only REALITY and DATA.

Let’s look at H4 chart right now,

• A higher level UP wave started in 2020–03–19.
• The length of Wave 3 and the length of Wave 7 demonstrate 2.618 Fibonacci Ratio.
• Most waves consist of at most 7 smaller waves of the same degree.

Million Dollar questions are:

1. When will the higher level UP Wave end?
2. OR has it already ended? Did it end in 2020–04–30?

If the market goes below the Key Support Line 1.2241, our wave count is confirmed, and a new bigger DOWN Wave has started. GBPUSD is a unique pair that a trend continues longer and more violent.

If you guys have followed my logic so far, there is not much to explain.

Final Thoughts on GBPUSD:

• Place SELL STOP at 1.2230 with STOP LOSS at 1.2480. A very high probability trade.
• Beginners usually get too excited when they see early indications of potential trades (e.g. perfect Fibonacci Ratio). They usually forget to confirm their trades and end up LOSING.
  In our case, we confirm our trade by waiting until the Key Support Line 1.2241 is broken DOWN.

As always, I really would like to know if you guys are following my mindset and what you guys are learning. Please comment and leave your feedback.