GBP/USD Trade Update
I missed out on the move that could’ve gotten me my third win in a row. Oh, phooey!
As you can see, the top of the range that I pointed out on my GBP/USD trade idea held. However, I didn’t feel confident in pulling the trigger right after the pair retested the 1.5500 handle because the candle didn’t close as a reversal candlestick. By the time I noticed that a bearish engulfing candlestick pattern had formed, it was already too late to jump in.
As mentioned by Pip Diddy, the BOE‘s announcement that it would provide the economy with another round of easing got the pound sold-off. When I was about to put my order in, the pair was already below the bottom of the range and the spread was too wide. Boo!
In other news, remember that HLHB Trend-Catcher open trade I had last Friday? Well, it turned out to be a winner! It ended up with a 120-pip win, making up for the 30-pip loss the system experienced on Wednesday. Just check out the chart I posted below for a full recap of the trades that the system generated.
On the economic front, we saw sovereign debt concerns take their toll on the euro at the start of the week. But it seems like risk appetite crept back into the market on talks about policymakers working hard to solve the crisis (injecting more capital into banks for instance) and allowed the shared currency to rally.
To cap the week off, we had Jean-Claude Trichet‘s last speech as ECB President yesterday which didn’t turn out to be as dovish as what market participants were expecting. From what I’ve read, it seems like a lot of investors were bracing for him to holler an interest rate cut. But instead, Trichet just announced more liquidity-boosting measures.
Anyway, back to my system. Even though I am forward-testing the Trend-Catcher on demo, its win this week has made me really happy. It tells me that the system is on the right track as it is able to catch the big trends. What I need to do now is put in some filters so that the system is able to exclude signals that lead to fakeouts. So feel free to hit me up with your suggestions. Thank you! Have a great weekend!