GBP/AUD (2H Chart)1. Trade Type:
This is a Sell (Short) trade on the GBP/AUD currency pair.
2. Key Chart Analysis:
Entry Zone: The trade is entered around the 2.05978 level.
Resistance Zone: Price has reached a strong resistance area (gray-shaded region), which was previously a supply zone.
Support Zone (Take Profit): The target (TP) is around 2.03313, where a previous demand/support zone exists.
3. Risk-Reward Ratio:
The stop loss (SL) is placed at 2.06559, just above the resistance zone.
The take profit (TP) is at 2.03313.
Risk-Reward Ratio (RRR): This setup has an approximately 1:4 risk-reward ratio, meaning for every 1 unit risked, the potential reward is 4 times that.
4. Trade Rationale:
Bearish Rejection at Resistance: The price attempted to break above the resistance but failed, indicating a potential reversal.
Market Structure: The market shows lower highs, confirming a downtrend continuation.
Supply Zone Confirmation: The price tested the supply zone and started forming bearish price action (possible rejection wicks and bearish candles).
Risk Management: A well-placed stop loss above resistance ensures minimal risk.
5. Trade Execution Plan:
Entry: Short GBP/AUD at resistance (2.05978).
Stop Loss: Placed slightly above the resistance at 2.06559.
Take Profit: Positioned near a previous demand/support level at 2.03313.
Trade Expectation: The price is expected to fall towards the support area if selling pressure continues.
6. Potential Trade Outcome:
If price respects resistance and moves downward, the trade will hit TP for a significant profit.
If price breaks above the resistance zone, stop loss will be triggered, cutting losses.
Final Thoughts:
The trade has a high risk-reward ratio, making it favorable.
It aligns with technical analysis principles (resistance rejection and trend continuation).
Proper risk management is applied to limit potential losses.
