Cable is currently retracing in an up trend.
There is a Double top formation on the daily chart at 1.6250.
Chart below:
Price has now pulled back to the 61.8% Fibonacci level and found resistance at this level of 1.6120.
Price has now broken down through the averages. This is my signal to enter a short position on a pull back as detailed below.
Levels and Chart below:
1st Entry: 1.6010
2nd Entry 1.6030
Averaged entry: 1.6020
Stop Loss: 1.6060 (40 Pips)
1st Target: 1.5860 (161.8% Fibonacci extension) 160 pips 4/1 Risk reward
2nd Target: 1.5700 (261.8 Fibonacci extension) 320 pips 8/1 Risk reward
As you can see from the chart below, the position was opened and the 1st target has been hit.
You have the option to hold the position to the second target or closed the whole position at the first target for a risk reward of 4/1.
Chart below:
This is a typical example of how I trade.
If you would like to know more then please email me at scott@maddogtrader.co.uk
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