I decided to adjust my stops ahead of potentially weak U.K. data today. Unfortunately for my forex trade, there was a rally leading up to the event, enough to take me out for a tiny profit. See how it went down in my forex trade review.
Original Trade Idea: Forex Trade Idea: GBP/NZD Pullback Short
After rolling my stop down to 2.2475, there was a brief scare of getting taken out there before the pair resumed back to the downtrend before the end of last week. This week, the bears took back control of the market, likely on sentiment we will get weak U.K. data this week. And while I was confident we’d see more Sterling weakness because of the dovish expectations on data, I decided to reduce my risk even more ahead of the U.K. CPI release by rolling my stop down to 2.2150. Not too long after that, GBP pairs rallied ahead of the release to close out my position at 2.2150.
1st quarter position: -234 pips
2nd quarter position: +150 pips
Total: +22 pips avg/ +0.03% gain
I guess someone knew we were going to get a positive surprise or was very lucky because that quick rally was definitely a surprise. Besides that, the market ended up dropping after the better-than-expected CPI data (huh?), which was another kick in the pants as I missed out on +300 pips drop on the session!
Overall, I’m going to blame myself on this one for being too conservative. I had already reduced my risk down to .31% and with the probability of weakness coming, I probably shouldn’t have reduced my risk more. So, what should have been an easy +0.40% gain and still in the trade, turned out to be closing out at only a +0.03% gain. In the future, I’ll try to trade less like a scaredy cat and more like a real cyclops!
Thanks for checking out my blog and stay tuned for my next trade idea soon!