Friday, January 9, 2009

GBP/USD momoreversal (continuing the action from yesterday's trade)

This momo was confirmation of the daily resistance mentioned in yesterday's post. It also allowed for greater profit potential as it came into the highs of the prior momoreversal, which had 3 waves of upside on the 30min prior to the pattern. The fact that it just missed the highs was a real strong point as that is what was needed to confirm the daily resistance (the trendline is downsloping)

I've left my original trendlines that I drew on the chart, in white, to show my thought process. The fine yellow lines show what I could see coming hence my 1.52930 target. My entry was 1.53220 with a stop of 1.53370. I got out at 1.52980 as pace began to shift, but price continued to the larger support zone (shown with a bold yellow line on the 1min, fine on the 30min, charts. My larger target was the horizontal support area from yesterdays pivot high- 1.52500, which you can see it got to as the economic announcement at 8:30EST came out. It then flushed to the high of the pattern, holding to the tick, before falling away again to give much larger gains. Time to start using 2 contracts so I can let 1 run!!

No comments: