Dear Trading Price Action Traders
Today has been a relatively quiet day for the world markets. Although, I do spot a nice opportunity for the short-sellers. What I see is more bearish momentum gathering in the GBP/USD pair. We saw yesterday some profit taking around the support levels, which resulted in a small bullish rejection around 1.5600. The following candle gives a significant signal. A bearish engulfing candle appearing after this rejection and just above a support level is a significant indication of the readiness of the sellers to continue the down-trend. It literally means that all of the profit-taking has been covered. Now more fresh sellers are adding to the bearish momentum that this pair has gained.
My idea of taking advantage of this situation is placing a sell order at 1.5637. The stop loss for this order should be placed at 1.5775. The initial target that I will be looking for is 1.5500. But as I like to say, it all comes down to price action. Depending on how it reacts first with the support levels at 1.5600 and then 1.5500 we can decide whether to take profits or let the position run. As traders trading price action, our ultimate goal is to let a position run as long as it can. A great example for that is my long DAX trade. Minimizing risk while returning as much as we can is the key to great success!