Shorting EUR/GBP at Previous Resistance – Trade Closed

Trade Closed: 2012-12-17 22:45

EUR/GBP Hourly Chart

The euro was pretty dang resilient last week, flying high like a Lebron James tomahawk jam. The combination of Berlusconi’s candidacy withdrawal, the EU’s progress in establishing the ECB as the euro zone’s banking supervisor, as well as the Fed’s decision to expand its QE program all helped the euro bulls gain momentum last week.

After hitting as low as .8036, EUR/GBP slowly crawled up the charts last week, eventually hitting my adjusted stop loss at my entry price at .8136.

Stopped out at .8136: +0 pips / +0.0%

Part of me feels a little bummed out, because I was already up 100 pips on this trade. How could I let ALL of those pips get away?!

I think a better way to have managed this trade would have been to split my position into two. Then I should have taken profit on one of the positions at around .8100 when price retraced, then let the rest ride. This way, I wouldn’t have wasted the whole move.

Hopefully, I learn from this experience and make the necessary adjustments in my future trades. For now, I’mma concentrate on my open AUD/CAD trade.

Hope you guys managed to make some pips of this setup! Thanks for following me and don’t forget to hit up my blog later this week when I give my yearly trading performance review!

Trade Update: 2012-12-12 02:47

EUR/GBP Hourly Chart

Just when I thought I was gonna be a Grinch this holiday season, this trade comes along and brightens up my month. Ever since I sold this pair, it’s been an absolute angel! Booyeah!

Not long after I solid this sucker, risk aversion crept back into the markets and dragged the euro down. Blame it on the euro zone’s ugly retail sales data, weak bond auctions, and growth forecast downgrade!

Obviously, this was exactly what EUR/GBP sellers needed to push the pair lower, and they did so aggressively. With the weekend approaching, I wanted to give my trade more room to drop, but at the same time, I didn’t want to risk losing dough so I did what any sensible trader would do – I moved my stop to break even.

Yep, this trade is already risk-free, baby! But right now, it seems that sellers have run out of steam, as the pair has retraced quite a bit. Hopefully, they’ll come pouring back in in full force soon, so I can hit my profit target before the week comes to an end.

That’s all for now, fellas. I’ll be sure to keep you guys posted with any new updates or trade ideas I may have. Feel free to send trade suggestions my way by filling out the comment box below. Peace out!

Trade Idea: 2012-12-04 22:55

EUR/GBP Hourly Chart

As it turns out, I was correct in my hunch that EUR/GBP would break through the previous week’s high. Now that the pair is about to test the .8150 MiPs, I think we could see the recent uptrend come to an end soon.

Not only does this line up with the top WATR, but it also happens to have served as a major resistance level in the past. If you scroll your charts back, or zoom out to a longer time frame, you’ll see that EUR/GBP found resistance at around .8150 on June 11 and on October 22, earlier this year. Furthermore, Stochastic is overbought on the 1-hour, 4-hour, and daily time frames, which could indicate that buyers are running out of steam.

On the fundamental front, I think the euphoria of Greece getting German approval could die down soon, and sooner or later, the market will realize that there’s still a ton of problems that need to be solved.

That said, I decided to jump in and short at market!

Short EUR/GBP at .8136, stop at .8190, take profit at .8000

Since this is a countertrend trade, I’ll be risking just 0.75% of my account. One other reason why I like this setup is because it provides me with a sweet reward-to-risk ratio.

There is some event risk in the form of the BOE and ECB rate statements tomorrow, but I don’t think we’ll hear anything we haven’t heard before. Therefore, those two events shouldn’t cause too much volatility in the markets.

Are you guys gonna join me on this trade? Or do you think the uptrend will continue? Lemme know by hitting up the comment box below!

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  • soporte vicious

    you’re best jeje

    • cyclopip

      Thanks, soporte vicious! May the pips keep coming your way! ;)

  • Malar

    Very good idea..Thanks..i went short at .8143 ..now so far 25 pips and counting more.thanks

    • cyclopip

      Sweet! Great entry! Good luck to us both!

      • seqburn

        you great dude! :)

  • Fitz

    I’m so glad I went with you on this trade. Do you think it’s a good idea to add to the trade by shorting at market at this resistance level? Like you, I’ve already moved my stops to breakeven last Monday.

  • seqburn

    why i follow u tred is becod the divergince appear in DAILY chart