Daily Battle Plan Practical Exercise 8
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I attach a daily chart for EURGBP showing the position late on 12th October. I have drawn trendlines, a resistance level and relevant Fibonacci extension levels. My plan for 13th October is as follows:
Price is above the MOR (shown in yellow) and buyers are still in control so I will be looking for buy trades. The nearest resistance level on the daily chart is almost 150 pips away with a 138.2 fib level just above it. 20 to 30 pips below the resistance level are two other fib levels; a 138.2 level (the first line below resistance) and a 261.8 level (the lowest of the horizontal lines). There is therefore plenty of room for the trade to develop, bearing in mind that entry and stop loss levels will be taken from the 15 minute or 5 minute charts. Whether an intraday target is taken for the trade or whether it is allowed to run overnight will depend on analysis on the day.
Levels to watch are 0.75561 (untested resistance level)
and 0.75244 (261.8 fib level).
Finally, major economic releases for both the Euro and the Pound are due tomorrow morning so it may be advisable to delay entry into a trade until their effect on price is clear.
Hi Ronald,
Lovely analysis – a nice example of a trade with plenty of potential to pop to the upside.
Did you manage to get involved with EURGBP this morning?
Hi Rich,
At present I am only paper trading until I complete the course. I would have entered i pip above the close of the 12.30 (10.30 UK time) bar (the first engulfing bar) with a tight stop i pip below the low of the bar. My target would be the 75 Gann level (o.74983), giving a reward to risk ratio of 2.5:1. However, momentum has been lost and the target has not been hit. Given the potential to the upside, I would be inclined to hold the position overnight and reassess the target in the morning. Does this seem reasonable to you?
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