So far so good on this GBP/NZD short forex trade! With price still heading south, I’m gonna trail my stop much lower again to lock in more gains. If you’re wondering what I’m talking about, make sure you take a look at my initial idea first and my previous trade adjustments.
Thanks to the pickup in risk appetite and the resulting rally among commodity currencies, GBP/NZD gained further bearish momentum and is closing in on my profit target around the previous lows. I’m even seeing a tiny complex head and shoulders pattern with a broken neckline around 2.1000.
Because of that, I’ve decided to lower my stop just slightly past that broken neckline support in case price suddenly pops higher from here. After all, we’ve got a speech by BOE Governor Carney and the Chinese PMI figures on tap so this pair could be in for some volatility. Even though I think Carney could reiterate his downbeat outlook for the U.K. economy and analysts foresee small gains for the Chinese PMI readings, I don’t wanna risk majority of my recent profits if the unexpected happens.
With these adjustments, I’ll be able to lock in a 400-pip gain, which amounts to a 0.33% guaranteed win on this setup, while still giving it room to breathe. Price still has a good couple o’ hundred pips to go before reaching my target, keeping the possibility of a 1.25-to-1 return-on-risk on the table.