Traders it's been a while but hopefully I can remain active in posting to my blog. I am looking at the AUD vs USD on a daily chart above. Based off of the Ichimoku signals this is a bullish market and we can see that just basically by looking at the trend. No indicators needed to see that! It's been bullish since the close @ .96946 on 6/1/12
What I will be looking for is a long opportunity based off of the daily time frame market sentiment. All Ichimoku signals on the Daily are bullish and our trading time frame of 4 hours is also all bullish. We like to have the two time frames in confluence with one another before we take a trade. On the chart above you can see that I have a long term profit target @ 1.08066 for roughly 350 pips from where the market is at this moment. If the market reaches this level it would represent a double top based off of the previous high at that level on 2/7/12 through 3/2/12.
I have a light blue line representing the daily Kumo resistance area so that may be an area that we need to break through for confirmation. I am expecting the market to retrace short term which I am showing on the 4 hour chart below.
Enrty # 1 would take place if the market fails to retrace and breaks and closes above the entry # 1 level. The stop loss # 1 would be used for this entry which is located at a support level along with confluence from the 23.6 fib retracement level..
Entry # 2 would take place if the market retraces to the red support line or the 23.6 fib retracement level which is in the same area. In this case we would place our stop at stop loss # 2 which is just below the 38.2 fib retracement level.
Entry # 3 would take place with a retracement to the 38.2 fib retracement level and in that case we would place our stop loss at stop loss # 3 which is slightly below the 50% fib retracement level which is also in line with the Kijun support level.
Entry # 4 finally would take place if the market retraces to the 50% fib retracement level which is also in line with the Kijun support level. In that case we would place our stop loss @ stop loss # 4 which is the 61.8 fib retracement level.
So our biggest stop loss would be around 60 pips which would be stop loss # 1 with a profit target of about 350 pips so that is minimal risk to profit which is what you want to look for when making a trade. As normal I will manage and monitor my trade because nothing is a lock.
That's how I am approaching this upcoming trading opportunity but keep in mind this is based off of technical assessment and fundamentals such as major news releases could change all of this. Hope you found this of value and until next time, GOD bless!