Do you want more than 300 pips?

300

Yeah, I know the answer, of course we all want 300 pips or more…

The question is how to get them.

The key is to find the the currency pairs that are more likely to move in one direction over the other. This way we’ll be able to control our risk.

That means that we need to look at the charts, find clear S&R levels, find clear swings and then you have a good candidate!

Look, you could use the most advanced technical indicator or tool, but I’m going to tell you something:

The market makes the indicator behave in “certain ways”… it’s not the indicator who makes the market behave in “certain ways”!

Please, read that statement again.

That means that the indicators is showing you how the market behaved… it’s not that it is going to tell you how the market its going to behave in the future…

Get it?

Ok, now back to those 300 pips!

GBPAUD Analysis

As I said, our job is to find the currency pairs that have the clearest market condition, and today, one of them is the GBPAUD.

Take a look at its long term chart:

GBPAUD Daily Chart

It looks like the GBPAUD its being rejected from an important resistance level.

If you have been following me you know that most of the time the market moves from on level to the other, so if it is being rejected from an important resistance level, it is likely to continue its way down until it reaches the next LT support level…

Aha!

And where is the next LT support level at?

At 1.7823

More than 300 pips from where the market is currently trading, which is at 1.8159, that is around 330 pips…

Ok, so you want 330 pips? Your job now is to look for a short opportunity in the GBPAUD, you can use the entry system of your choice, just make sure to ignore every long opportunity and focus on shorts.

Your Turn

What do you think about the GBPAUD?

Are you going to trade it?

By the way… What kind of entry systems do you use?

Please share your thoughts.

Tags: , ,


Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

  • Faizan Khan

    Raul Brother,
    I appreciate ur work…it’s awesome…u really predict near to perfect as perfection itself is an ideal condition which doesn’t exist :) but let me say u are amongst those analysts who have learned the forex game by heart :)
    live long :) !

    • Raul Lopez

      Thank you Faizan for your kind words…

      Dont hesitate to comment should you have any question about my articles/analyses

      Good luck!

  • Waqas Khan

    opps i am late. what should i do? wait for retrace or leave?

    • Raul Lopez

      Waiting for a retracement sounds good…

  • Dan

    Raul,

    I was not thinking very well. The comment in my previous post (backed up by a strong Pound and a weaker dollar) Is not correct. We should be going long with the strong pound against the weak AUD. Having said that my view has changed entirely. I am now of the opinion that the price action has retraced 38.2% in wave 4 and is about to go long in wave 5 with a potential target 1 at 1.184324 (fib expansion 61.8 ) and target 2 at 1.85054 (FE 76.4) It may even go further to FE 100 or 127
    Disregard the ramblings in my previous post.

    • Raul Lopez

      Hehehehe I well… I agree more with your previous comment!

      But as I said, only time will tell and the market is going to do what its gotta do right?

      Good luck!

  • Dan

    Evening from Australia Raul, (Absolutely beautiful weather here at the moment)
    My amateur view is that I think you are on the ball with shorting the GBP AUD (backed up by a strong Pound and a weaker dollar, and I suspect that the trend overall is changing from long to short.) BUT I would not jump in just yet as I reckon it is about to retrace back up ( I base this on the H4 stochastic currently in the oversold position below the 25 level.)probably 70 to 90 pips before it goes short in earnest. I would place a short trade on the retracement after a bit of a zig zag on the way down short) I do not think it will reach the 1.7823 as predicted as the Daily 200 moving average as well as the H4 shemen lines will give it support at around 1.78970
    But who am I to say this. Just my thoughts for what they are worth and for constructive comment.

    • Raul Lopez

      Hey Dan, you always have beautiful weather in Australia dont you??? :D

      Thank you for your comment, I really appreciate it!

      I few years ago I dropped all my technical indicators, I dont base my analysis on them but will take it in consideration… The reason I think the market will continue its way down until that level its because most of the time the market moves in swings, from one level to the other…

      But only time will tell if that’s what its going to do! At the end, the market will do what its gotta do… right?

      Thank you again for your analysis and dont forget to let me know should you decide to trade it!

      Good luck!

  • Muhammad Ali Awan

    Raul, that was great, will it touch the SL at 1.7823, and do you have any idea about gold.

    1.7823#sthash.eVFYj9Wi.dpuf
    1.7823#sthash.eVFYj9Wi.dpuf
    1.7823#sthash.eVFYj9Wi.dpuf

    • Raul Lopez

      Sl at 1.7823??? Does that mean that you are in a long position???

      XAUUSD is heading towards 1200… I’d look for short opportunities.

      Good luck!

      • Muhammad Ali Awan

        Sorry I was not clear enough. I was talking about GBPAUD will it touch the level 1.7823.

        • Raul Lopez

          I hope so :)

          That means you are short right?

          • Muhammad Ali Awan

            so should I stick with the selling trade. :/

          • Raul Lopez

            Well, that’s a decision you need to take… but just so you know, I would stick to that trade…

          • Muhammad Ali Awan

            Thanks a lot. :), I will stick to it.

          • Raul Lopez

            No problem…

  • shahsunashfaq

    A nice post as always. thank you for that. trading in the direction of market condition have helped me to get consistent result and definitely i will be looking for GBPAUD now

    Right now what i have been seen that EURCAD is hitting its major support level around 1.4784. and it got clear swings and SR level. i would like to hear from you what you think about it :)

    happy trading

    • Raul Lopez

      Hey! You are right, the EURCAD is trading too close to the LT support level, so we need to wait a little longer here and see what the market is going to do around this level.

      Good luck!

  • forexft

    Market is in a broad bull channel making HHs and LHs but it can be traded to the downside too with clear setups. Just have to make sure to sell high. This pair is swinging nicely !!

    • Raul Lopez

      I’d only look for long opportunities here…

      Good luck!

  • Raul, if it is likely to continue down, why not just get in and ride it until it goes to the lower support level. Why risk missing the downtrend? It may not retrace..

    • Raul Lopez

      You have a point Craig… But I need to follow the system, it’s the only way to get consistent results :S That’s one of the reasons I use both, retracement and breakout signals :)

      Goos luck!

      • Hi Raul,
        Not sure if you used the breakout method on this one. It is now retracing, but will it retrace back .8200? IMHO, that level would have been good to go short on.

        what do you see on the GBPUSD?

        • Raul Lopez

          Yep, its retracing back, but I still think it has plenty of downside potential… so I’ll wait! Are you holding this trade?

          GBPUSD is not that clear… (from my point of view)

          Have a great week ahead Craig!

  • tp

    GBPAUD looks like it has rejected the resistance level. I’m not going to trade this because I’ve lost $3000 in April. I have decided to take a break and will resume trading in June 2014. If I were to take a trade in this, I would wait for price to pull back to the top of the down channel in H4 before taking a short.

    • Raul Lopez

      I’m sorry to hear about your $3000… I’d suggest you to resume your trading when you are completely sure that you can get consistent results… (contact me at info@straightforex.com).

      About your plan to trade the GBPAUD, I definitely agree with you, we need to wait for a pullback to the ST resistance level…

      Good luck!