EUR/USD 13 OCTOBER 2011

EUR/USD

No trade setup on EUR yesterday. Price went on to rally to take out the A high, starting the reversal process on the 1H chart.

FOR TODAY:

We now have a new AB upswing in play. The A is down at 3144 and the B is at 3833. This is a very big AB swing. We now have to wait for either a BF786 setup for a short trade entry, or we need price way down at the 618/786 of this swing for a long trade setup. Both of these entries will be confirmed by cs formations.

SHORT: WILL ONLY BE GOING SHORT IF:

Price rallies to the BF786 and gives us a bearish cs formation after that, or we get another run at the highs and then get a bearish cs formation. Trade this for 80 pips since it’s a shallow bounce. Stops above the cs formations, 50 pips max.

If we don’t get the cs formations we are looking for at the fib levels then we don’t trade.

LONG: WILL ONLY BE GOING LONG TODAY IF:

We need price way down at the 618/786 of this AB swing, which is very far away at present. Once we hit the 618 wait for a bullish cs formation, place stop below the low of the cs formation, max 50 pips stop, limit will be 80 pips for the 618 entry. Else lower down at the 786 will be the next opportunity.

If we don’t get the setup we are looking for then we don’t trade.