T36 – GBP/AUD

IMPULSE – CORRECTION – IMPULSE

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ENTRY

Daily/4H/1H/30mins timeframe (select only 1)

[1] Price trailed by 30SMA – ensure strength of first impulse wave (✓)

[2] Pullback between 30SMA and 150SMA(✓)

[3] Corrective structure formation with 2×2 touches (✓) Flag

[4] Stop order at the break of corrective structure with stop loss after swing L/H (✓)

[4] Stop order after price bounce off area of value with volatility stop

Additional confluences: Support or Resistance, ADX40, Linear Trend Lines, Fibonacci Retracement, ATR and Elliot Waves.

1% capital risked for potentially 2.3R

Open: 1.7216 | Stop loss: 1.7149 (-67 points) | Take Profit: 1.737 (+154 points)

Remarks:

MANAGEMENT

Keying in the trade, use volatility stop placed under/above an established swing L/H or moving average cross or estimating volatility using ATR.

Real stop loss placed under/above the anticipated swing L/H using 150SMA as a guide.

Take profit calculated using the length of the prior impulse wave rounded off to next nearest swing point/key level.

Once entry triggered and break out, shift automated volatility stop to real stop position.

download.pngAt 50% of 2nd impulse or a swing L/H established, shift stop to break evenMiscalculated the prior impulse wave – it should be shorter, therefore, the flag pattern has played out. Bullish sentiment is still present, downside protected. 

At about 80% of 2nd impulse, shift stop to the 50% mark or below/above swing L/H.

If price breaks and closes under/above the 30SMA, tighten stop loss and prepare for manual exit.

EXIT

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[1] Initial stop loss

[2] Trailing stop, as mentioned under management

[3] Manual exit due to change of momentum and break of market structure

[4] Take profit

Remarks: The reason why managing risk, protecting downside and make shifting to breakeven a priority is important.

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