Would these examples be good opportunities?
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Hi,
Just looking over some of the charts from today and both the GBPJPY and GBPUSD offered similar looking charts. Lets start with GBPUSD. My thinking from the daily charts is we are stuck in sideways price action with some resistance close by. Drilling down to the 15 min we can see the effect of the news a nice move to the upside which ends close to the gann 125 level and just below the resistance marked on the daily chart. After a move that big there is a good chance of some profit taking so a sell here could be a good opportunity, looking to take profits early mind you and not holding the position. So looking for a 2:1 trade. We have some high impact news at 1:30pm so would be looking for a short opportunity after the news. A good looking bear engulfing candle does appear at 3pm, risk about 15 pips so would be looking for around 30 pip profit. Maybe not such a good opportunity as only around 25 pips to the fib 38.2 level.
Looking at the GBPUSD 5 minute we get the ma crossover at 13:40, about 10 pips risk so would be looking to close at 20 pips or more. Down to the 38.2 is a good 30 pips so enough potential for a good risk to reward.
The GBPJPY was pretty much an identical situation, daily chart some sideways price movement close to resistance after the up move from the news. So again looking to the short side and looking to take profits sooner rather than holding onto any trade. Looking at the 5 min chart, price is up at the gann 125 level and daily resistance after the recent up move. The first bearish engulfing and ma crossover candle would have resulted in a loss of around 13-15 pips for a tight stop loss. But the second opportunity of ma crossover would have been a good result. Again the fib level of 38.2 offers a good target with plenty of pips for a 2:1 trade.
Whilst these potential trades don’t take into account the MOR/DOR bias would they still be worth considering? Please feel free to comment and point out anything I have missed. Thanks.
Hi scott,
I like the ideas, I would maybe not take these trades because the market is in consolidation, if you look back on what is happening with it, the only time the market really shows movement is with news releases. however, like you said, sticking to 2:1 trades does let the market move enough to look in profit. 🙂
cheers,
Lewis
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