So much for an uptrend! No thanks to weaker-than-expected U.K. reports last week, my long GBP/USD trade hit its stop loss before I could say “short!”
Original Trade Idea: Jumping in on GBP/USD’s Uptrend!
A few days ago I bought Cable when doubts over the Fed possibly raising its rates this month haunted the dollar. Of course, it also didn’t hurt that early releases from the U.K. hinted that the economy hadn’t suffered much over the Brexit vote. Lastly, I could resist jumping in on an uptrend I spotted on the 4-hour time frame.
Unfortunately for my trade, GBP/USD barely bounced from the 50% Fib support before finding resistance at the mid-channel line. Then, tier 1 reports like retail sales, employment numbers, and CPI came in slightly weaker-than-expected and seeded doubts over the strength of the U.K.’s economy after the Brexit vote. Last but not the least, dollar bulls bought back the dollar like it was the hottest thing on NY fashion week.
All these factors mixed in and inspired strong a selloff for GBP/USD. The pair dropped my bottom WATR stop loss before I could say “short!” I ended up with a 0.25% dent on my account after sustaining a 150-pip loss.
I guess I could have exited the trade sooner. I could have closed the position just below the day’s low especially since it was also around the time when the pound was dropping like there was no tomorrow. Luckily, I managed to limit my losses by not placing my second order around the 1.3200 MaPs. Good thing I wanted to wait for bullish candlesticks before risking another 0.25%!
Looks like I’m not getting that winning streak today. Hopefully this week’s volatility will yield some pips though! Got any setups you’re looking at?