Update: Time for Another GBP/USD Bounce?

All positions are finally closed for this trade!

Thanks to more positive U.S. reports the Greenback extended its gains against most of its counterparts yesterday. GBP/USD was no exception as the pair blasted below 1.6500 and took out the stop of my remaining position at 1.6490. Here’s a summary of my trade:

GBP/USD Daily Forex Chart

GBP/USD Daily Forex Chart

Position 1: Entered at 1.6483 and manually closed at 1.6593 for a 125-pip (+0.30%) gain

Position 2: Entered at 1.6696 and stopped out at 1.6490 for a 205-pip (-0.52%) loss.

Total: 80-pip loss and a 0.22% hit on my account.

I probably could have lessened my risk a bit earlier. I don’t regret adding my second position because I thought that price had breached its former highs at the time. However, I could have taken off the losing position when I saw that the pair had started to consolidate around the 1.6700 area. I could have also closed all my positions and just waited for another chance to jump in near the rising trend line support that I was watching.

Fundamentally there were also signs that the pound’s rally is taking a breather (if not completely over). Remember that last month was when Mark Carney got busy hinting that the BOE isn’t likely to raise rates despite the U.K.’s good employment prospects. Janet Yellen also didn’t help the pound by hinting at more tapering from the Fed. Last but not the least, risk aversion from Ukraine’s political issues also took its toll on high-yielding currencies like the pound.

I’m a bit disappointed that I lost pips on a trade that I held on for so long. Kinda like being in a long-term relationship that started out great but ended with a giant ball of disappointment. But hey, at least I salvaged a couple of pips right before the FOMC! Plus, I have lessons to take with me on my next trades. But for now it’s a few episodes of House of Cards a pint (or two or three) of cookie dough ice cream for me. Thanks for reading my blog and I hope you have a great weekend!

XOXO,

Huck

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  • John

    Hi Huck

    Do you onlu use Forex.com as your broker and would you recommend them – I currently have an account with Capital Spreads, but their charts are not good and I am looking for something better.

    I have been trading forex for about a year and am building up slowly – not easy, but fantastically exciting.

    kind regards

    John

    • Hucklekiwi Pip

      Hi John!

      I’m glad you’re having fun with your trading! I’m using a different broker so I don’t really have experiences with Forex.com or Capital Spreads. You can try opening demo accounts with other popular brokers and see if you’ll like their charts better.

      Thanks for popping by!

      Huck

      • Alex

        I had problems with forex.com! On a live account I could not close a position using their platform for iPad, at that time I even recorded my iPad screen to be belived because it didn’t happened once and had some error problems! This happened last summer! P.s. My internet speed was blazing fast!

  • darthfrancis

    Huck you held on to your trade way too long. You gave back alot of pips on your first trade! you should of definitely took some profit off the table at the 1.68 mark. And can I ask why you opened a second position at where you did as it doesn’t seem a logical area, not a pull back and right under a KHL.

    • John

      She thought that price would breach out, so she bought the pound. Considering the rising, super strong pound at that time I don’t blame her.

      • Felipe

        Her stochastic was overbought, it wasn’t a good call.

        • Hucklekiwi Pip

          Yep, I bought the pound when it had broken above January’s highs and I thought I saw a breakout. I waited it out thinking that it was going to be a break-and-retest setup…until it wasn’t. 🙁

  • Peterkin

    Huck,

    I’m noticing you put your 2nd buy trade on when Stochastic was overbought. But keep an eye on stochastic because look where it is now.

    Anyway – your trade shows guts. Way to go!

    • Hucklekiwi Pip

      Haha thanks, I should have paid more attention to it considering that it’s one of the reasons why I entered my first position. How about you? Do you also trade Cable? 🙂

  • Moz

    Hi Huck,
    You opened your P2 after a dark cloud cover formation. Should have exited by the EOD.
    Also watch for the 1.6470/50 level on the cable. Support by 89 EMA and also the 61.8% ret on the daily. Might get a decent bounce from here. If the structure resistance at 1.66 and 1.6650 is taken out perhaps then it was just a retracement and cable could retest the highs.
    Good trading!
    Cheers,
    Moz

    • Hucklekiwi Pip

      Hi Moz!

      It looks like the 1.6470/50 level that you pointed out is holding pretty well. I’m looking at the retracement too but I’m having trouble finding a fundamental catalyst for another push higher. Do you have any ideas?

      Thanks for your two cents btw 🙂

      Huck

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