May’s Pay Your Mortgage Trade Setup Idea
This month's ProAct Traders “Pay Your Mortgage Trade” idea is found in the GBPCHF pair. This month’s is different in that both Elkana and I have the same currency pair but with a differing view, so we will see which one plays out.
Scott
When looking at this pair on a 240 min chart you'll notice that we are in a nice trending move to the downside. The nice thing about this setup is that it has two great trading scenarios depending on your view and both Elkana and I represent those two views. If the currency continues to move in the trend direction it has 120 Pips to the 0.618 Fibo and then after the correction it has 240 Pips down to the S6 for a total of 510 pips with the potential for an even further move of 210 pips down to the day chart bottom @ 1.2403 for a total of 840 Pips if it trend down all the way. A break up instead of a just the correction would yield a potential 390 pips up for a total both ways of 510 pips.
Elkana
He is looking for a move down to the 0.618/0.786 Fibo but a solid bounce there to finish the 2nd wave and a marching 3rd wave move back above wave 1 to the 1.4500 area. That move could produce 120 Pips down and then 750 Pips to the upside.
The pair’s ATR (Average True Range) is currently 142 pips a day (14-day average) so a 510-750 pip trade could take a while. Both Elkana and I agree that this is a great opportunity. Which is it? The market will confirm that as we go along.
Our trading methodology is based on proprietary technical indicators. We pay attention to what the big banks are doing in the markets (the Big Boys) and specifically look for opportunities that have a high opportunity and low risk. We always identify our target before entering a trade, and we focus on the risk of the trade instead of the reward. We have (and follow) rules, and we press our winning trades without exception.
Remember that we recommend that you always trade with stops. And if you don't trust yourself or think you'll get cold feet in a long trade like this, then place the trade and walk away. Better to get taken out by a stop or target than to second guess an active trade and take yourself out. Do your research before you place your own trade. Trust your research.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
ProAct Traders™ (hereafter, PAT) assumes no responsibility for errors, inaccuracies, or omissions, nor does it warrant the accuracy or completeness of the information in the materials that comprised the text, graphics or other items contained in the ProAct Charts as a result of computer or power failures or interruptions in the electronic delivery systems via the Internet. PAT shall not be liable for any special, indirect, incidental or consequential damages including without limitation losses, lost revenue, or lost profits that may result from these materials.
Foreign Currency Trading carries a level of risk / reward that may not be suitable for all considering participation in the market known as Forex. The Forex is a "zero sum" market and its end effect is that there are an equal number of winners and losers. Consequently, the possibility exists that you could sustain an eventual loss of some or all of you initial investment. Therefore, you should never invest money that you cannot afford to lose. Before deciding to trade the Forex, you should become thoroughly educated in how the market works, have a sound money management plan and then carefully consider your investment objectives, level of experience, and risk appetite. If you have any doubts, seek advice from an independent financial advisor.
Recommended Content
Editors’ Picks
AUD/USD post moderate gains on solid US data, weak Aussie PMI
The Australian Dollar registered solid gains of 0.65% against the US Dollar on Thursday, courtesy of an upbeat market mood amid solid economic data from the United States. However, the Federal Reserve’s latest monetary policy decision is still weighing on the Greenback. The AUD/USD trades at 0.6567.
EUR/USD recovers to top end of consolidation ahead of Friday’s US NFP
EUR/USD drove back to the top end of recent consolidation on Thursday, recovering chart territory north of the 1.0700 handle as market risk appetite regains balance heading into another US Nonfarm Payrolls Friday.
Gold recoils on hawkish Fed moves, unfazed by dropping yields and softer US Dollar
Gold price clings to the $2,300 figure in the mid-North American session on Thursday amid an upbeat market sentiment, falling US Treasury yields, and a softer US Dollar. Traders are still digesting Wednesday’s Federal Reserve decision to hold rates unchanged.
High hopes rouse for TON coin with Pantera as its latest investor
Ton blockchain could see more growth in the coming months after investment firm Pantera Capital announced a recent investment in the Layer-one blockchain, as disclosed in a blog post on Thursday.
NFP: The ultimate litmus test for doves vs. hawks
US Nonfarm Payrolls will undoubtedly be the focal point of upcoming data releases. The estimated figure stands at 241k, notably lower than the robust 303k reported in the previous release and below all other readings recorded this year.