GBP/USD: Going With the Trend – Trade Closed

Trade Closed: 2011-8-18 00:13

GBP/USD Hourly Chart

I have to admit something… I closed my shoulda-woulda-coulda been a winning trade because I panicked. As it turns out, going long on GBP/USD yesterday would’ve been a REALLY good trade.

I was watching the news yesterday and as soon as I saw that the Claimant Count Change report and MPC minutes came in worse than expected, I immediately closed my trade.

At that point, I thought (and I still do think) that exiting my trade was the best thing to do. After all, having two more people in the MPC shed their hawkish feathers for dovish ones could significantly affect the bank’s stance on monetary policy.

I figured I was going to get stopped out since the move at the wake of the news seemed really strong. So I closed my trade early at 1.4360. But as it turned out, the pair stopped dropping 3 pips above my stop loss.

OHHH MYYY GOODNESS!!!

Yes, I am so frustrated with myself I think I can bite off my own arm!

Trade closed at 1.4400 for -40 pips / -0.8%

Had I held on to my trade, my profit targets would’ve gotten hit. But noooo! I let my fear get the best of me and closed my trade with an .80% loss. Okay, I’m gonna be honest and say that this trade has really got me extremely annoyed. Any tips on how to feel better?

Still, I’d like to congratulate hose who took my trade idea and held on until the profit targets were hit! If you were one of those, hit me up in the comments!

Trade Idea: 2011-8-17 2:05

GBP/USD Hourly Chart

Hello there my lovely readers! Today, I’ve got a sweet trend setup on GBP/USD. I hope this turns out better than the last trade, as I am pretty confident on this one!

As you can see from the chart that I posted above, the pair has been on a medium-term uptrend as price has been making “higher highs” and “higher lows.” With the pair being strongly supported by a rising trend line, I’m hoping to jump in on a better price.

The “better price” I’m eying is 1.6400. I think the pair could still dip lower because the Stochastic has not yet hit the oversold territory. Also, the 1.6400 level, more than being a major psychological round number, coincides nicely with both the rising trend line and 50% Fibonacci retracement level.

I’m optimistic that there’s still enough good vibes from yesterday’s better-than-expected CPI report from the U.K. to fuel the pound bulls into another rally.

Yeah, I’m also aware that there are a couple of event risks on tap for the pound. Checking out BabyPips.com’s forex calendar, I found out that the U.K. claimant count change report and the MPC meeting minutes are due today.

Doing my homework, I read that not a lot of analysts are keeping their hopes up that the reports would be bullish for the pound. But of course, there’s also a chance that they would turn out as pleasant surprises for the market.

With that said, I’ll be keeping my fingers crossed for the claimant count change report to come in better than the 20,100 forecast. As for the MPC minutes, I think we would need to see that the BOE is still hesitant to increase its asset purchase facility in order for the pound to rally. Wish me luck!

Again, here’s my trade idea:

Limit buy at 1.6400, pt1 at 1.6470, pt2 at 1.6550, stop loss at 1.6350. I stand to gain 1.45% on this trade with a risk of 1%.

What do you think? Hit me up on Facebook or Twitter (@LoonieAdventure) with your thoughts on my trade. You can also leave me a comment in the box below. Thank you!

  • Dreamer

    I followed your plan L Buy at 1.6400,my SL hit at 1.64345. Turned out loss -55 pips

    • huck

      That’s weird… In my broker account, it did not even touch 1.6350. The lowest it went was 1.6353. I know broker data feeds differ, but that’s a big difference!

  • nat

    There is something not right with the different way you handle your short and long trade!! You had a similar long trade on the same pair which you closed early too with a lost but you prefer to hold on to a short trade for EUR/USD when it was losing and further it with shorting it 4 times!!! You got to recheck and recalibrate your one sided (Short only) mentality of the market!!

  • Leonidas Georgiou

    I’d say it’s about time we see a reversal :P I don’t think it’l break over 1.67-ish.
    What are your thoughts?

  • PipBandit

    I think the biggest problem with this trade was the position of the stop loss. It looks like you arbitrarily picked a stop loss of 50 pips instead of looking for a technically efficient level to place it under. If you can’t find such a level or it’s just too far away then you’d you’d probably be better off tucking it a bit under a round number like .50 at least.

  • Stephen Oatley

    I’m going short with cable as price has broken out of the upper trend line and showing signs of a fadeout. Fib levels on the 4 hr chart are being respected and price is getting ready to retrace possibly to 23.6 on the bottom trend-line. Good US data today may just top this move out  

  • Gray_Hunter

    Bad luck, Huck.

    I always kick myself a bit when I lose a trade, but I REALLY kick myself when I mess with a trade halfway through and make matters worse.

    I’ve learned that if I’m tempted to change a trade as it’s in progress, I’m trading on emotion and not on my system. I’m either fiddling with stops (trading on fear) or screwing with take profits (trading on greed). Either way, I’m not detached, and when I’m not detached I lose most of the time.

    I think it’s a very rare trader who can honestly say they adjust trades (particularly with cutting losers short) in a completely detached manner. I know for sure I’m not one of them, so I incorporate that part of my personality into my trading strategy.

    Once I set a trade, I leave it alone and assume it’s going to lose, no matter how confident I am about the setup. Mentally I have already kissed those pips that I’ve risked goodbye. If I get up in the morning and the trade has gone in my favour, good. If my trailing stop has moved up to breakeven, great. If I’ve already hit take profit, awesome!

  • Max

    I wish you luck but I am going short in this one. and looks like Pipcrawler also has the same idea (http://www.babypips.com/blogs/… )

    • nat

      Both you and pipcrawler were wrong. Pair about to hit 1.66! Long live HUCKs!!

  • fxsableng

    Great trade Huck, I see both your target already hit. Congratulation :)

    • huck

      :( Sadly, I failed to follow my trading plan. I’m so frustrated.

  • Pipnocchio

    I feel your pain. I hate it went the market moves in the opposite direction of your trade, just enough to hit your stop loss and the reverse.