GBP/USD 20 OCTOBER 2011

GBP/USD

No trade entry on GBP yesterday, price did give us the bearish cs formation we were looking for, but missed our entry by 1 pip, price came to 5809, and forward order was at 5810. Price then fell overnight.

FOR TODAY:

Today is a DA86 trading day where we are looking for price to continue down towards the B low. We will look to sell rallies after bearish cs formations. We can look to ST these entries as well, maybe down to 5500, just inside the 618 at 5492, unless we get a clear bullish cs formation at the BF786, trade this long and exit on a clear bearish cs higher up – if we get one.

SHORT: Will be going short only IF:

We get a rally and a bearish cs formation, trade this as a ST to the 5500 area mentioned above, stop above the cs formation, max 50 pips.

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

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 A high since we would have already have had an 86 prior. 

This entry will be giving us heads up that price is heading for the A high at 5851. But if we get a clear bearish cs formation higher up, exit the trade to be safe.

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