Hey traders, heading off for a good start :)
Here is a possible trade I’d like you take a look at… But first, let me share with you a few things about this particular currency pair!
Its always good to know the personality of each instrument, its not very effective to treat in the same way all of them, because they behave in a different way. Heck, you cant even treat the same instrument in the same way one day from the other… go figure…
Get to know the GBPAUD
Its the GBPAUD… The first thing that you need to know is this one is a currency pair that really moves.
A 40 or a 50 pip move in this currency pairs means nothing, that means that we need to use large SL levels.
But in the same way, we can use large take profit (TP) levels. So its one for the other.
So at the end, the risk-reward ratio remains doesn’t get hurt.
It also has a larger spread then usual.
Are you with me?
GBPAUD Long Term Analysis
Here is the daily chart:
One of the main principles of the methodology I use is that the market moves from one level to the other.
In this case, the GBPAUD broke through an important resistance level (1.9166), so that means that it is likely to continue its way up, until it reaches its next long term level (which you can get from the weekly chart – 2.0262).
So you know the GBPAUD is likely to continue its way up, therefore its recommended only to look for long opportunities.
Now, from where can we go long?
GBPAUD Short Term Analysis
Let me show you the 15M chart:
Here we have different possible scenarios to open your trade:
- You can go long just where the market is currently trading at: 1.9567
- You can wait for a retracement to the short term support level (1.9512)
- Or set your order 15 – 20 pips (above) from where the market is currently trading at
In all cases, your SL level should be placed below the ST support level (1.9512), remember what I told at the beginning of the article about the GBPAUD? Ok, be careful with that!
We’ll see how it goes!
What other instruments are you monitoring?
What do you think about this signal in the GBPAUD?
Are you going to take it?
Let me know in the comment section.