October Pay Your Mortgage Trade: GBP/USD
Scott Barkley | Oct 03, 2017 01:17PM ET
This month's ProAct Traders “Pay Your Mortgage Trade” idea is found in the GBP/AUD pair.
10/03/17 1.6927 start
We see that we have finished a strong up move in a large range but with a bias to the downside. We have a double top already in place and moving confidently along in a 1 wave to the downside. We are looking for an initial small move to the 0.382 Fibo @ 1.6794 and expect the 2 wave bounce there up to the 1.6927 are and then the turn for the BIG 3 wave. There is a huge Wide Open Space (WOS) below 1.6767-1.6453 – Don’t Miss this BIG Opportunity! Watch for a significant bounce @ the 0.786 Fibo to print a 4th corrective wave before the resumption to the downside targets @ either the Support @ 1.6167 ( 779 Pips) or the day chart support @ 1.6016 (926 Pips) . Any pullback offers increased opportunity to add positions.
How to trade it? You will need to wait for your set-up to show up, for London and New York traders, that will mean waiting for the reaction now in the current area. Take your first entry and use the respective risk-reward ratio to start trading this currency pair. We have preplaced entry orders (sell stops) on the break of each Fib and barrier to the downside and any rally should be considered an area to add to the position. DO NOT TRY AND CROWD THIS PAIR WITH TIGHT STOPS. Remember the “pullback is your friend” in route so use those to add to the position.
Be careful at the 786 Fibo @ 1.6386.
The pair typically has pullbacks in the 120-150 pips range so every pullback could add an additional 150 pips to the trade with another position. Currently the ATR (14 Day - Average True Range) of the currency is 181 Pips per day, so this might take about 2 weeks with pullbacks.
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