I am a bull on GBPAUD

GBPAUDDaily

Price opened at MPP is currently heading downwards toward MS1 which coincides with a a previous support level. 21 is below 55 and 5 is below 8. These MAs are currently flat indicating that the market is in a range. Stochs is entering oversold zone . I am looking to enter either at MS1 or MS2 when stochs comes up above 20% line.

GBPAUDH4

Price opened at WM3 and is currently at WS1. 5 is below 8 and 21 is below 55. Stochs is oversold. I am waiting to go long when Price comes up from oversold. The profit taking target is at WR1 but I expect some resistance at WPP/MM2 confluence

GBPAUDH1

Price opened at DM2. 21 is below 55 but 5 just crossed above 8. Stochastic is up and I am entering long with a profit target of DM4/MM2 confluence or a conservative DR1/WM2 confluence.

2 thoughts on “GBPAUD Long Trade Plan16022017”

  1. Ryan Gandalf van Jaarsveld says:

    Dear Mpho

    Thank you for the trade plan. Some thoughts…

    Daily
    Price opened between MM3 and MMP – bears sold – monthly target MM1/ MS2. Note that the 55 was at this resistance level which indicated a double bottom. Price made a higher low though after moving higher towards the 200 EMA bears sold at the 21 indicating that the trend is still bearish and so bears are trying to get this down to the monthly target. Support is eyed at 1.6050 and 1.60 with resistance eyed at 1.62 – the role reversal of the previous low. I would not buy this based simply on the stochastic – I would need confirmation that the bearish trend is over. I would therefore like to see a higher high and break of the 21 and 55 with a plan to buy the higher low. While an overview of the chart does indicate that we are currently moving sideways I don’t see why bears would not sell at 1.62 if price came all the way down to 1.650 or 1.60 and bulls went long – price at that level would be a lower low and when I see a lower low I expect a lower high. Therefore I would need to take this into account when putting a trade plan together for this pair. Price drops down to MS1, moves up, bears sell at 1.62 and then price comes back to support and bulls either enter again or we break through support and test the next level of support at 1.5850/ 1.58/ 1.5750. Note that MM1 is just below this level and that is the target for the month. If I was a bull then I would pay attention to the second touch at MS1 or at the lower level. If price breaks through resistance at 1.62 then I would keep an eye out for a higher high or pay attention to what bears do at the 21 eyeing 1.62 as support. However one must note that when bears sell of the 21 we expect a continuation of the original move and that means down. In summary I would not want to buy a lower low – I would rather buy a higher low with clear confirmation that we are done making lower lows and lower highs especially when the target is MM1/ MS2.

    H4
    Target for the week is MM1/ MS2 – you are relying too much on stochastic. I look at this chart and I see bears selling at role reversal WM2 to take it lower to the weekly target. Also if your plan on daily was to buy at WS1 you will notice that this is just below WS2. I would not buy this as I have to assume that bears are going to take it lower and hit their target for the week. Also note that 1.6050 is at WS2 which is part of the bottom of the range you identified on daily. Remember that you analyse on daily – move down to H4, look for confluence and additional support and resistance and then move down to H1 and do the same. Your charts tell you a story from one time frame to the next. And if you see a 21 below a 55 with a downward angle and price is making lower lows after lower highs then it is not bullish. A higher high followed by a higher low would be interesting for a bull or if price was coming off a reversal pivot like WS2 with a trade setup on a lower time frame.

    H1
    21 is below the 55 – that means if you are a bull now is not your time. The 21 being below the 55 means with a downward angle means we are currently bearish and therefore would need confirmation that the trend is over before buying. In a downtrend we expect to see LL and LH – when that stops happening then bulls will start paying attention – ideally you want to see a reversal pattern at a solid level of support followed by a higher high with a plan to buy the higher low.

    Something Wayne taught me – if ever you look at a pair and you feel like you have to outsmart the market to make money walk away – find another trade. If you want to sell AUD and buy GBP then take a look at some other charts and see if there are any better opportunities – is GBP strong or weak at the moment? Is AUD strong or weak at the moment? Are you maybe trading two currencies together that would be better traded against a stronger or weaker counterpart? It’s these strategic decisions that will really help you identify opportunities that will work in your favor and take the blood, sweat and tears out of trading.

    Something else Wayne taught me and this one is a biggy – NEVER counter trend trade unless you are trading off a reversal pivot (S2/ R2) and you have a clear setup. The trend is your friend until the end- you want to go with the flow and not against it. If the trend does not agree with your bias then walk away or wait for everything to be inline with your bias.

    Be the ocean – not the cork!

    Best
    Ryan Gandalf
    Coach MetaTraders.com
    Analyst Forex.Today
    e-mail: [email protected]
    skype: Ryan.Gandalf

  2. Omphemetse Rangaka says:

    I have nothing much to add .Ryan you have said mouth full and also educated me as well and fully agree with your technical analysis ,sometimes we just not patient and in a hurry to get in the trade .
    Lets be patient and follow the basic rules .
    Amen

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