The Forex Chronicles

Archives for September 2023

GBP/USD Analysis 24 September 2023 – Where is the Bottom?

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GBP/USD Weakness

With the Bank of England keeping interest rates on hold this week after better than expected inflation numbers, it is no surprise that the British pound has been selling off hard.

Higher interest rates attract overseas investment, and so by indicating that interest rates possibly may have peaked, or at least kept on hold for a while, the pound has now become a lot less attractive.

As a result, the GBP/USD has dropped to 1.2237, having traded as high as 1.3143 back in July, and has seen a 3-day drop of nearly 200 pips.

Therefore many traders will now be asking themselves if the GBP/USD is close to a bottom and potentially ripe for taking a long position, or whether it still has further to fall.

Possible Support Level

One thing I will say is that it is very dangerous to try to catch a falling knife. If a market is trending strongly downwards, it has a lot of momentum behind it. So diving in with a long position when you think that it may have fallen too far is often a losing strategy.

The popular oscillating indicators, such as the RSI and stochastics, are all indicating that the GBP/USD pair is oversold on the daily chart, but they were also oversold when the GBP/USD was 200 pips higher last week, so it is foolish to rely on these indicators alone.

You really need to look to the left of the chart and look for possible support levels on the chart because this will indicate areas of support where sellers are likely to exit their positions and buyers are likely to step in.

In the case of the GBP/USD pair, there is a lot of price action between 1.19 and 1.21 so this is a good support zone, and there are double bottom lows from January and March at 1.1841 and 1.1803 that should act as strong support levels, as you can see below:


Trading Idea

Anyone thinking of taking a longer term long position may therefore want to start scaling in between 1.19 and 1.20 (the lower half of the support zone), adding positions down to the previous double bottom lows of 1.1803, with a stop loss somewhere below 1.18.

If the price breaks through the previous lows of 1.18, this would break the thesis of the trade, and you would really want to get out fairly quickly because there is clear air on the chart until the next arwa of support around 1.1150.

I should emphasize that this is just a trading idea and not financial advice of any kind.

Final Thoughts

I myself like to trade potential reversals on a shorter term basis, waiting for times when the price is extremely oversold on the 1-hour, 4-hour and daily timeframes and hitting key support levels. Then I will start to scale into positions.

So I will be waiting for potential set-ups tomorrow and later on in the week.

If the GBP/USD could get down to previous levels of support around 1.18 – 1.20, and is down 1 daily ATR or more on the day, that for me would be a great set-up.

My Forex Funds Shut Down by US and Canadian Regulators

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The prop industry has been exploding in popularity in recent years as more and more traders attempt to earn a fully funded account and trade with another company’s capital.

However yesterday it was rocked by the news that one of the biggest prop firms in this space, My Forex Funds, had been taken down and were being investigated by both Canadian and US regulators.

This will have been a devastating blow to the thousands of people from across the world who have one or more funded accounts with My Forex Funds, and the many others who have recently paid for challenges.

Website Notice

If you visit the MyForexFunds.com website, this is the notice that you will be presented with:


It has recently been updated because they originally stated that the company were being investigated by a Canadian regulatory body (where the company is based), but they have now disclosed that they are under investigation by a commodities authority (CFTC) in the US as well.

Why are My Forex Funds Being Investigated?

With more and more online prop firms opening up all the time, I think many people have been expecting the prop industry to be scrutinized a lot closer by regulators, and it now appears that this time has come.

Many of these prop firms are not regulated at all in the countries that they operate, and because they are enabling trading on a variety of instruments, both on simulated and live accounts in some cases, they are operating in a very grey area.

Furthermore, the whole business model of these prop firms has always been very dubious. In order to pay as much as 75-90% profit share of each fully funded trader’s profits, they require lots of traders to pay for (and fail) challenges, or go into drawdown and lose their account if they do pass the challenge.

Therefore this starts to resemble a ponzi scheme operation when you look at it closely.

Some companies claim that the fully funded traders do actually trade with real funds on a live account and that they mirror the trades of these traders to hedge themselves, but it is not clear if this is really happening or not.

In the case of My Forex Funds, some of the issues raised by the CFTC are pretty damning:

https://www.cftc.gov/PressRoom/PressReleases/8771-23

You will quickly discover that although My Forex Funds claimed that your success was their success, they were actively working against traders, whether that was through deliberate slippage when a trader was opening or closing a position, delayed fills or closing accounts abruptly.

Indeed if you watch this deep dive video from Rafael Kimmel, he goes through all of the key points raised in the CFTC documentation:


When Will This Investigation be Concluded?

According to My Forex Funds, the first court hearing is 11 September in the US, followed by a Canadian court hearing shortly afterwards.

So we should know more after this date, but it is possible that this investigation could take a lot longer, and anyone hoping for a quick resolution may well be disappointed.

Will Any Traders Receive Refunds?

It is far too early to know if anyone who has purchased a challenge or an instant funded account, or if anyone due a payout will receive any kind of refund when this investigation is finally settled.

It is a possibility, but even if you are entitled to a refund, it is often a long drawn out process and it could take months or even years to receive any money back.

Final Thoughts

It is worth emphasizing once again that this is an ongoing investigation and we should know a little more after 11 September.

I think the key takeaway from all this is that prop firms cannot be relied on to make a living.

You really need to have a personal trading account with an actual broker if you are generally profitable and want to earn a steady income because prop firms are unregulated, and any prop firm accounts that you currently have could easily disappear overnight.

Just today MyFundedFX have announced that they will no longer be accepting any new customers from Canada, so the knock-on effect of this investigation into My Forex Funds has already begun, and is likely to continue to impact this industry moving forward.