This month's ProAct Traders “Pay Your Mortgage Trade” is found in the EUR/AUD pair. Both Elkana and I have the same currency pair but with a slightly differing view, so we will see which one plays out.
Scott
The nice thing about this setup is that it has two great trading scenarios depending on your view, and both Elkana and I represent those two views. I have the pair in a large range and I am waiting for a bounce on the 0.786 Fibo to start the upward move. After the bounce there are 720 pips to the 1.5500 psychological number and an additional 150 pips above that to the range top.
Elkana
EUR/AUD has been in a long protracting downtrend, however since December 2015 I am noticing a support area at around the 1.4460/1.4360 price area. Euro currency is at present falling, and as I'm writing this blog (July 2016 NFP just came out with strong positive data) the price is even falling lower, reaching nearly the 0.886 Fibonacci level.
What is the opportunity then for us?
At present I am waiting and expecting a bounce off the Fibonacci as shown on the image. If the bounce occurs, I will expect a 3rd wave buy opportunity.
How do we trade it?
You will need to wait for your set-up to show up. For London and New York traders, that will mean waiting for the formation of the rectangular pattern (pole trade) and using the respective risk reward ratio to start trading this currency pair.
Where should we expect the price to go to?
If the 3rd wave on the daily time frame is correct, then Elliott Wave Theory states that it will need to break the 1st wave above the 1.5600 price area. That will give us a whopping 1000-pip move. Don't forget that I am looking at the daily time frame, where it will take its time before accomplishing the move.
General information
Our trading methodology is based on proprietary technical indicators. We pay attention to what the big banks are doing in the markets (the Big Boys) and specifically look for opportunities that have a high opportunity and low risk. We always identify our target before entering a trade, and we focus on the risk of the trade instead of the reward. We have (and follow) rules, and we press our winning trades without exception.
Remember that we recommend that you always trade with stops. And if you don't trust yourself or think you'll get cold feet in a long trade like this, then place the trade and walk away. Better to get taken out by a stop or target than to second guess an active trade and take yourself out. Do your research before you place your own trade. Trust your research.
Risk warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
