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:
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!