Trade Closed: 2011-5-12 4:07
I jumped in at market, held my breath for what seemed like an eternity, and boom! GBP/USD sky rocketed up the charts and I came out on top with a 1% gain. Whew! I didn’t know trading the news could be that exhilarating!
The Bank of England (BOE) sounded more hawkish expected in its inflation report yesterday, as I hoped they would. According to Pip Diddy’s Daily Forex Fundamentals, the bank still expects inflation to exceed its target and hinted that it may holler an interest rate hike later this year. Booyeah!
To be honest, I wasn’t really that confident in my trade. Good thing I had enough guts to pull the trigger when I saw that the pair already broke above the symmetrical triangle. I wish I could have been more aggressive though. For instance, I could have placed my stop just below the breakout candle at around 1.6375 instead of 1.6350. Or I could have aimed for the 1.6500 handle as my profit target.
But eh, I’m happy with how my trade turned out. Maybe next time I’ll try to be more aggressive when trading the news.
Took profit at 1.6450 for 53 pips/ +1.0%
P.S. Day trading is AWESOME!
Trade Idea: 2011-5-11 4:10
BREAAAAAAAAAAKOUT! It looks like GBP/USD just broke out of its symmetrical triangle formation and is heading for a previous resistance level. Without hesitation, I clicked the buy button and hopped in!
As I’ve read in the School of Pipsology, symmetrical triangles are bilateral chart patterns that could break either up or down. In this case, I saw it break up, so I’m hoping to ride the move to the former high at 1.6450. As for my stop, I’m going to place it at 1.6350, below the breakout candle and the opening price during the Tokyo session.
Whew! Who needs coffee when you have a nice breakout play to wake you up at four o’clock in the morning, huh?
Anyway, I’m looking forward to the Bank of England‘s Inflation Report due in an hour. From what I’ve read, it seems like traders are giddy for the details of the report as it would somehow provide the market an idea when the bank will start raising interest rates.
I know, I know, the latest U.K. CPI report for March fell short of the consensus by 0.4% when it came in at 4.4%. However, I think that the disappointing inflation data might have convinced a few traders to shift their rate hike speculations to the downside.
Because I believe that low expectations is the key to happipness, I’m thinking that the slightest hawkish remark from BOE Governor Mervyn King could send the pound skyrocketing. After all, I doubt that one month’s worth of data will be enough for the BOE to completely shrug off the risks of inflation.
Since this is only a day trade, I’m going to close one hour after the BOE inflation hearings (8:30 am GMT) whether the trade is winning or not.
Once again, here’s what I did:
Bought at 1.6397, profit target at 1.6450, stop loss at 1.6350.