Sophia Todorova is the host of the live trading room for the London session. She has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens. To Trade Live with Sophia Join Winners Edge Trading Premium Services.
The weekly chart of Gbpaud shows a potential bullish reversal setting up. The potential right shoulder is currently testing the 61.8% Fibonacci retracement level, at 1.6950s. The Fibonacci extension tool shows the 1.618% extension at 1.9330 (shown by the red horizontal line on the chart below). This is a weekly setup, and as you can imagine, it will take quite a while to set up, and then reach target. However, it can offer very good trading opportunities on the smaller timeframes. This down move appears as a range breakout on the 4hr chart, and as a downtrend on the hourly and lower.
TRADING STRATEGY
In this article, I am focusing on three main targets on the 4hr timeframe, because they represent significant resistance that need to be breached in order to consider further weekly targets. This 4hr chart below is labeled with the profit targets I am considering.
For entry, I am waiting for a reversal on the 4hr or hourly timeframe. I cannot specify a stop loss now, because I do not yet have the reversal setup. It is important not to use a stop that is too tight. A reasonable stop loss, at the minimum, should go below the lows at the point of reversal. I will be managing my risk to compensate for a larger stop, by cutting my trade size down, if necessary. I also will be moving my stop to breakeven, as soon as the first target has been reached.
Thanks a lot for reading 
If you are interested in trading this with me, it is a good idea to follow me on twitter, since I am able to give quick updates there, and you will be able to get them instantly.
When trading always use a stop loss and calculate the proper risk management for your account. This analysis aims at providing assistance to the forex trading community here at Winners Edge Trading, thereby helping them to make informed trading decisions.
The last trade setup played out very well: http://www.winnersedgetrading.com/range-trading-setup/
Other useful blogs:
Forex Crunch:Reminder- Trivia Quiz- Win Cash Prizes
The GeekKnows- Daily commentary on eurusd
