DTT Trade Management GU & EU

Yesterday’s FOMC (April 30th) statement was a very quiet event. Apparently the statement did not impact the average opinion of the market. Other reasons could be that large parts of the world are having a public holiday on May 1st and that the market is expecting another major news event on Friday (NFP).

GBP BREAKOUT

The long awaited bullish breakout of the GBPUSD materialized yesterday – despite the lack of momentum during the news event. Also the Nathan’s GBPCHF trade received a great bounce. Price managed to break above the triangle resistance (orange) and above the rising wedge chart pattern (indicated by magenta).

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DTT SETUPS

According to our DTT strategy the breakout was captured via our “strike” trade plan. After a strike there is always the potential trade setup of the “boomerang” which is capitalizing on the pullback and continuation scenario.

SCALE-IN

The GBPUSD already has bounced off of the 38.2% Fibonacci level and I’m sure that some of the trading room members managed to scale in a 2nd long in this spot (great job if you are in; let us know in the comments).

CRUCIAL TRADE MANAGEMENT

At the same time the stop loss of original first entry needs to be moved to below the current 1 hour bottoms. However also for the Fibonacci entry at the 38.2% I would use the same trail stop loss.

Here’s why: with this particular structure I would not allow for more patience. The consolidation at the 1.6820 daily top and resistance was lengthy and the break above this zone occurred with decent momentum.

PROTECTION AGAINST FALSE BREAKOUT

It’s always the best to keep trading simple. Therefore the momentum break out must receive follow through, otherwise another round of consolidation or could take place or even worse the break out turns out to be a false break out. I do not want any shallow Fib bounce (like the 38.25) trade to be caught in such a pattern.

Technically speaking the trail stop loss is below the triangle, hourly support, and 38.2% Fib, with the extra advantage that any tiny loss from the 38.2% Fib is well compensated by the potential profit from the first long. So let’s “simply” reduce the risk and lock in some profit!vi

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TARGETS

The main GBPUSD target is the -27.2% Fibonacci target at 1.6979. The trade will use a trail stop loss behind each 1 hour bottom until the take profit level has been hit.

Yesterday’s daily candle is a decent break out candle, but it does have a bit of a wick on top. Therefore traders with longs want this daily chart to continue with the upside momentum in which the daily lows and highs are continuously making higher highs and higher lows.

EURUSD BREAK

The EURUSD is attempting to break the trend line (magenta). The break out could occur at any moment as price is approaching the trend line and yesterday’s daily high and is only a couple of pips away from breaking. If the break does not occur then a retracement of yesterday’s bullish candle could occur as well prior to finding bullish continuation.

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Did you trade the GU? Are you looking to trade the GU or EU during today’s London or New York session? Comments are always appreciated.

Thanks for sharing this article and Happy Trading!

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