GBP/USD 7 DECEMBER 2011

GBP/USD

We had a DA786 trading day yesterday but price fell and took out the stop and then found support at the 86 with a morning star formation.

FOR TODAY:

Today we will be  looking for long trade entries, buying dips until price reaches the BF786. We are looking for yesterdays support low to be holding.

If price takes out the A low then we will be reversing on this time frame.

SHORT: Will be going short only IF:

With the 86 fib bounce of yesterday, we can only sell up at the BF786 at 5732. This will have a limit down at the A low since we had an 86 prior bounce, stops above the cs formation, max 1.5% risk.

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 are looking to buy dips after bullish cs formations until price hits the BF786. Stops below the low of yesterday’s cs formation, max 1.5% risk. This will be a ST entry so we don’t expect price to necessarily rally to the limit in one session.

For position traders – we were stopped out (at zero) of the long entry we were in. Use the dip and bullish cs formation – if we get one, to re-establish the long position.

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