Retracement Play on GBP/USD! – Trade Closed

Trade Update: December 13, 2013 | 3:02 am
It’s a no for this trend play!

Thanks to a better-than-expected U.S. retail sales report, investors felt more confident to expect the Fed to start tapering as early as the first quarter next year. Unfortunately for me, this excited the dollar bulls, enough to pull Cable to my stop loss level. Right now I’m looking at a 75-pip, 0.24% loss. Boo!

One thing I learned from this trade is that I really, really have to be careful about putting on technical trades ahead of major news events. At the time I thought that the 61.8% Fib had held and that 1.6400 would become a solid support level. I probably should have just taken off my position and considered entering at market after the report was released.

Another lesson learned the hard way! Have you guys encountered trades like this before? What did you do at the time? Let me know! 🙂



Trade Idea: December 11, 2013 | 9:37 am
Ready for another trend trade? I know I am!


A few minutes ago I spotted a possible retracement play on GBP/USD’s 1-hour chart. Right now Cable is bouncing off not only from the 50% Fib, but also the 100 and 200 SMAs as well as a rising trend line. Oh, and I think I’m also seeing a bullish divergence in the chart!

I’m keeping my risk contained for this trade though. For one thing, we don’t really have another U.K. report due for the rest of the week. Over the next trading sessions the pair will probably move to the tune of USD sentiment (hello retail sales!), taper expectations, or risk appetite.

This is my trading plan for now: I risked 0.25% at market (1.6395) and placed an 80-pip stop, which is below the bottom weekly ATR. I don’t have a profit target yet, but I’m thinking of adjusting my stop losses ahead of tomorrow’s U.S. retail sales or the weekend.

What do you think? Is this something you would take?

Thanks and XOXO!


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  • PipPong88

    Hello Huck. I’ve always enjoyed your trade ideas and when I read about this trade setup, it’s the same with what I have in mind! It is assuring to know that someone out there had the same thought (especially from yours) and I almost entered the trade too.

    But I hesitated as I have been burned the same way for too many times. My thought on this is that the market won’t react in the most “logic” way, and there is always an explanation (or excuse) for the other side of the story. Just as we thought the possibility of tapering will send the bears pouncing but… Too bad this didn’t work out for us….

    Anyway I’m waiting for your next trade idea! Cheers! =D

    • Hucklekiwi Pip

      Thanks for your thoughts, PipPong88!

      I probably should have listened to the part of me that wanted to only take 0.25% risk instead of 0.50%. Oh well.

      I hope trades like these don’t keep us from taking good setups! Losing is part of the game after all. We just have to control our risk and keep on improving our strategies.

      Best of luck to your next trades! 🙂

  • FxSniper

    Gbpusd is not ready to rally until 1.6250 has been effectively re-tested and it is coming nearer and nearer. I am ready with my long arm between 1.6200 and 1.6250 for the great journey into 1.6750 area. I shorted briefly but hurriedly exited because it was clearly dangerous.

    • Hucklekiwi Pip

      Good for you! I also have my eyes on 1.6250 although we probably won’t see the level unless there’s a massive move over the next couple of hours 🙂

    • ForExchange

      Hi FxSniper!

      You have seen a good point there with the 1.6250. How did you calculated that one?

      As I see your ideas, they are mostly good, my feeling is that your take profit level is however always way too optimistic and therefore it never reaches your target.

      Waiting for your reply

      • FxSniper

        Thanks for comments. I am positive about the markets generally and about trading particularly. I don’t think I am too optimistic with any of my projections. It is about the probabilities that I see when I plot my entries. Whether they finally reach or not is of course above my pay grade. That belongs to the market to decide. The first swing on gbpusd about which 1.6250 was considered has come and gone. We are at this very second right at the next bullish swing and my ultimate target based on what I look at has actually increased to 1.7000! Call that too optimistic? I don’t know yet until we begin to see lower highs and lower lows. Until then, I think I have safe bet on that figure! My current long is right at current 1.6390 with a firm stop at 1.6329. So long as that risk remains in tact, I will stay in this latest swing and will be pursuing 1.7000 as the swing unfolds. Of course 1.6750 should be a logical first tp on any longs off current level. In terms of overall projection for what I consider the current bullishness on this pair, it falls at 1.70000. I hope I have answered your concerns

  • FxSniper

    Today close shows me a high probability of just that happening before friday runs out. So I hope to be picking up a bargain buy before the week closes. From my perspective, it is very possible to short at current rates targeting said bargain. but I will let the sellers do it then, probably pick up a bargain on the long side as the week winds down.

    • Hucklekiwi Pip

      Yep good idea. Good luck on your trades today! 🙂

  • FxSniper

    At this time, I am starting my rounds of the Sterling buys with gbpnzd. hopefully, I pick up gbpusd too

  • Adnan

    what i think is if you wanna trade in Sterling GBPJPY is way better then GBPUSD…

    • FxSniper

      Depends on one’s objectives. I didn’t say I won’t pick gbpjpy but i want to buy it whenever it decides to retrace to a bargain price. i’m looking at 165. 50 area

  • Adnan

    GBPUSD will Probably Retest 1.62610 ( Price which was major resistance few weeks back )

    • Hucklekiwi Pip

      Price reached 1.6262 on my chart. Good call!

  • FxSniper

    After late price action on Friday, I am now lowering my buy limit on this pair from 1.6250 to 1.6210. That seems the near spot for serious buy interests. I will risk until 1.6129 and target 1.6750.

    • Hucklekiwi Pip

      Cool. Do you think GBP/USD will reach your PT this year or next year? 🙂

      • FxSniper

        I do. why not. We still have two whole weeks. Yet, Gbpusd has yet to pick me up for the tour. So I may end up missing out. Will have to console myself with eurusd if I get ignored

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