GBP/USD 19 OCTOBER 2011

GBP/USD

Price gave us the DABF trading day yesterday with price falling down to the BF786 and further to take out the A low doing a reversal again on the 1h chart. Trade was good for 80 pips profit. We now have a new bearish AB swing in play. Price has retraced back to the 618 so new are already in sell territory.

FOR TODAY:

With the new AB downswing in play we need a bearish cs formation at the 618/786 for a short trade setup. Else if we get down to the BF786 and we get a bullish cs formation, we will go long as a ST with limits set at the 786 since we would have had a 618 prior.

SHORT: Will be going short only IF:

We are already in short territory, enter short on a clear bearish cs formation setup, stop above the high of the cs formation. Trade this as a ST opportunity since we have a clear bearish cs formation on the daily chart. Stops above the high of the cs formation, max 50 pips.

LONG: Will be going long today only IF:

We get down to the BF786 and then get a bullish cs formation, trade this as a ST to the 786 since we would have already have had a 618 prior.

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