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Update: GBP/NZD Long Opportunity at 2.1800

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Last updated 1/5/2010 7:46 PM EST (GMT -5) 2 Comments

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Bradley W. Gareiss

Technical Analyst, GFT

The bullish butterfly pattern we posted earlier has completed on the GBP/NZD 8hr Chart.  The symmetry of this pattern is great because it has two potential point X candidates that converge at almost the exact same level.  The trade also completed with nice time convergence.  Currently the trade is hovering just below the entry, however it is still above a couple of levels that contributed to this trade.  If you are not in the trade, you can still enter as long as the trade is at 2.1800, and it has not hit our stop at 2.1567.

We bought (and can still buy) the GBP/NZD if it falls to 2.1800 (Point D).  Point D is located at the convergence of the following points:

To recap, we bought (and can still buy) the GBP/NZD at 2.1800 with our stop placed at 2.1567.  Our initial profit targets are 2.2150 (38.2% of CD) and 2.2429 (61.8% of CD).

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  • Daily Chart - We have seen support off of the 78.6% Fibonacci retracement at 2.1718.
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  • 8hr Chart - Bullish butterfly; buy at 2.1800.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

The views of the authors and analysts are not necessarily those of Global Forex Trading, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. Global Forex Trading and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

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Comments (2)

NeoFX

January 06, 2010 at 05:31 PM ET

Hello, have been following your recommendations for a while and your analysis is truly spectacular. I've been trading for about a year and doing decently I guess given the complexity and volatility of this market. Although i've grasped solid money management tips thru educating myself and research, I sometimes wonder however what type of contracts you're suggesting we enter. And of course I realize it all depends on experience and account equity and levels or aggressivness, but on this one for instance we're looking at a 230-pip stop.

sounds like a lot to me :)

can you shed some light on this?

thank you!
R

bgareiss

January 06, 2010 at 07:56 PM ET

A 230 pip stop should not carry any more weight than a 23 pip stop. You should be risking the same amount on each trade regardless of magnitude. You have to adjust the size of your position so the risk is equal. Most experienced traders risk 1-3% of their account for each trade. Brad

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