GBP/USD 8 MAY 2012

GBP/USD - follow me on twitter @fxdailyforecast and stocktwits.com/fxg

No trade setup on Sterling yesterday, price rallied just past the 382 of the AB swing.

FOR TODAY:

Price is currently in no man’s land for our trading system, we have to wait for a retracement back to the 618/786 for a short entry, or a test of the BF786 followed by a bullish cs formation for a long entry.

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 rally followed by a bearish cs formation after price hits the 618/786. 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:

Price reaches the BF786 and gives us a bullish cs formation for a long entry. Stops will be 10 pips below the cs formation, limits defined at time of entry.

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