GBP/USD 10 MAY 2012

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The long trade setup on Sterling yesterday was stopped out for 46 pips loss. Price fell and took out the B low giving us a new AB swing, then bounced sharply out of the lows.

FOR TODAY:

We have a new AB swing in play, price has already hit the 618 of the swing, so a clear bearish cs formation can be traded short.

Else long entries are only considered once price hits the BF786 followed by a bullish cs formation.

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

SHORT: Will be going short only IF:

We get a test of yesterdays cs formation followed by another bearish cs formation.  Else if price rallies higher up we have a 786 at 6169, a bearish reversal here will initiate a short trade setup. Place stop 13 pips above the high of the cs formation, max 1% risk. Limits will be defined later.

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 will need price to test the BF786 followed by a bullish cs formation for a long trade setup. Stops are 10 pips below the cs formation. Limits as at time of writing will be at 6159.

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