GBPUSD 12-20-06

12-20-06

GBPUSD

The pullback trade to 1.9470 never happened yesterday. I mentioned that the GBPUSD had moved above the moving average on the 60 minute chart and a breakout trade above 1.9500 was possible. That should have been the trade I took. The move above the MA and the highest high in the trading range + 1 pip is normally the trigger I use as a way to make my trading as mechanical as possible. Find a trigger to enter your trades and stick to it. That way, you take the emotions out of the decision to enter and, over time, you are able to measure your results based on your setup and trigger. For today, I will let the GBPUSD which has already moved over 50 pips base near the area of supply at 1.9750. The breakout area at 1.9700 would be a good place to enter on a pullback if it was near the bottom of the range instead of the top. With the US Dollar near support, I would be careful if you do trade that pullback this morning. Use a buy stop at 1.9703 once the GBPUSD trades below 1.9696, and a 10 pip stop after entry. Trade small in case the bounce in the dollar is big.