GBP PULLBACK

NOW IF YOU WANT TO PLAY BOTH SIDES THIS IS HOW YOU DO IT.

WE HAVE A BEAR PIVOT ON THE 4HR.

NOW, WE KNOW THAT IT WILL TAKE AT LEAST TO THE CLOSE OF THE NEXT 4HR BAR FOR THE MARKET TO FORM A BULL REVERSAL ON THE 4HR.

LOOK AT THE CHART. THE PIVOT POINT OF THIS BEAR PIVOT NEEDS TO BE TESTED. IF IT PULLS BACK TO THE PIVOT POINT DURING THIS CURRENT BAR, THAT IS A PULLBACK TO THE PIVOT INSTEAD OF A REVERSAL TO THE PIVOT.

THEN YOU COULD GO SHORT AT THE PIVOT (WITHIN THE RANGE OF THE BEAR SWING BAR) WITH YOUR STOP ABOVE THE HIGH OF THE BEAR SWING BAR.

FOR EXAMPLE; YOU COULD PLACE A LIMIT ORDER RIGHT NOW TO GO SHORT ANYWHERE BETWEEN 9846 AND 9872 (THE RANGE OF THE SWING BAR). AND PLACE YOUR TARGET AT 9820.

AT THE END OF THE 4HR BAR, IF YOU ARE NOT IN YOU CANCEL THE ORDER. IF YOU ARE IN AND THE MARKET IS STILL WITHIN THE RANGE OF THE PIVOT AT THE CLOSE OF THE BAR, YOU WOULD CONSIDER AN EXIT. THE BEST PULLBACK PLAYS WILL BOUNCE BACK QUICKLY OFF THE PIVOT.

IF YOU ARE NOT IN AT THE CLOSE OF THE BAR, YOU START LOOKING FOR A BULL PIVOT BACK UP.

THIS WAY IF YOU'RE IN AT THE CLOSE OF THE BAR AND IF LOOKS LIKE A REVERSAL IS COMING YOU CAN CLOSE OUT YOUR POSITION AND LOOK TO SWITCH LONG, CLOSING OUT YOUR PULLBACK PLAY WITH A VERY SMALL LOSS OR A SMALL PROFIT.

SINCE THE RANGE OF THE SWING BAR IS ONLY 26 PIPS YOU CAN PLACE YOUR STOP 4 OR 5 PIPS ABOVE IT AND RISK ABOUT 30 PIPS.

YOU WOULD PLACE YOU TARGET AT THE OPEN OF THE LONG RANGE BAR SINCE WE KNOW RANGE BARS ARE SUPPORT/RESISTANCE.

SO, YOU COULD ALSO PLACE A LIMIT ORDER TO BUY AT THE RANGE BAR OPEN.

IN THIS WAY YOU HAVE 2 OPEN ORDERS, 1 LONG AND 1 SHORT. YOU HAVE BOTH SIDES COVERED. THIS IS REALLY THE ESSENCE OF LCM.

YOU COULD PLACE BOTH LIMIT ORDER AND CHECK BACK AT THE CLOSE OF THE NEXT 4 HR BAR TO ASSESS YOUR POSITION. NO PIP BY PIP STRESSING.

THIS IS HOW YOU PLAY BOTH SIDES. YOU CAN FLOW AS THE MARKET FLOWS AND IN THIS WAY IT DOESN'T MATTER WHAT YOUR BIAS IS BECAUSE YOU ARE RIDING THE WAVE WHICHEVER WAY IT FLOWS.

IF THE MARKET CONTINUES DOWN WITHOUT TESTING THE PIVOT, THEN WHEN IT DOES HIT SUPPORT THE ODDS ARE MUCH HIGHER THAT IT WILL REVERSE BACK UP TO TEST THE PRIOR BEAR PIVOT.

AND PERHAPS MOST IMPORTANTLY, LOW STRESS TECHNIQUE.

JERRY