Countertrend move in Cable this week? – Trade Closed

Trade Closed: 2010-03-23 19:45 EST

PoD Chart

Good evening! UK inflation data came out only slightly below expectations, but it was the CBI Distributive Trades that came in as a big disappointment (13 vs the previous month reading of 23) that pushed Cable lower to my stop out level and beyond.

Remaining position stopped out at breakeven (1.5050).

1st Half: +135 pips
2nd Half: +00 pips
Total: +0.675% gain

So, even though we didn’t get a move to previous resistance, it was still a nice one day gain, and I think with the weaker data released today, we will see a return to the downtrend for Cable.

For today, I’ll be watching EURUSD for a short term volatility as the European session is packed with eurozone data.

Thanks again for checking out my blog and the interesting comments below, good luck and good trading everyone!

Trade Adjustment: 2010-03-22 21:00 EST

Good evening! Cable managed to get down to my entry point at 1.4950 and found enough buyers to push the pair higher throughout Monday’s European and US trading sessions.

The pair has since moved as high as 1.5110, triggering my second order to go long another half position at 1.5050. I have also adjusted all stops to 1.4950. This puts me in a full position with an average price of 1.5000.

The BOE has forecasted that the current economic weakness may bring down inflation. This could be a huge risk event (and bad for long Cable trades), so I have decided to adjust my open position ahead of the UK report.

With the UK CPI soon to be released in the upcoming European trading session, I have decided to close down my initial half position at 1.5085 for a 135 pip gain.

This leaves my second half open and I will adjust my stop on my remaining position to 1.5050. This means I have no risk on the table and I will continue to hold my long position.

After the UK CPI data is released, and if my trade isn’t stopped out, I will add again if the trade goes my way.

Thanks for checking out my blog, and stay tuned!

Trade Idea: 2010-03-21 23:22 EST

PoD Chart

Good morning fellow Forex freaks and geeks! It looks like Cable is presenting me with my swing trade for the week as we have a couple of technical setups lining up. It’s going against the grain, so I’ll have to tread a bit more carefully than usual…

On the charts, we can see a few things going on here. First, the pair is testing a rising trendline acting as potential support. This area happens to line up with the psychologically significant level of 1.5000, so traders may be watching and waiting for the pair to stall or break. Also, stochastics are indicating that the recent swing lower from 1.5350 is a bit exhausted; is the market out of sellers? Last, and definitely not least, we can see hidden bullish divergence over three points as price lows trend higher while stochastic lows trend lower.

On the Forex calendar this week, we do have data from both the US and the UK with the potential to cause a ruckus. Most notable would be the UK CPI data on Tuesday, the US Durable Goods orders on Wednesday, and US GDP and PCE data on Friday. Besides these events, the rest of the calendar is packed, and there’s plenty of side stories, including the Greece debt situation, US vs. China trade wars, and the recent passing of the US health care bill to bring surprises and shifts to risk sentiment. As always, stay alert and flexible.

So, I plan on going long based on the technical setup, but because this goes against the downtrend on the higher time frames I plan on risking half of my usual 1%. I will wait until the market does reach the trendline before going long, and my stop will be a healthy 100 pips to give breathing room to this trade. Like my last trade, I will add onto this position every 100 pips and ultimately target the area around the previous swing high. With every addition, I will adjust my stop 100 pips, so I will never risk more than 0.50% on this trade. If it does hit my final profit target, I stand to make 5% or a 10:1 reward-to-risk ratio. Here’s what I am going to do:

Long GBPUSD at 1.4950, stop at 1.4850, final pt at 1.5350

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

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15 comments

  1. Newbornbabytrader

    With such a strong move downwards on 19/3, certainly some correction is expected at 1.4950 area but any rallies would be well capped and i would rather go short at 1.5120-30 area where 10&20SMAs are sitting at the moment. Only 2 months into trading wish me luck pls. Cheers

    Reply
  2. Newbornbabytrader

    With such a strong move downwards on 19/3, certainly some correction is expected at 1.4950 area but any rallies would be well capped and i would rather go short at 1.5120-30 area where 10&20SMAs are sitting at the moment. Only 2 months into trading wish me luck pls. Cheers

    Reply
  3. cfxland

    Good luck, visit this blog n others more often, they will show you how market analysis are done.

    I c from the time made dis post, price cudnt hav been at 1.5120, typo maybe.

    YT

    Reply
  4. pipsprof.

    I think the cable is capped at 1.5380 and is resuming the long trend downward move now,the broken down bearish rising wedge on the H4 confirms this,and price will aim for the larger channel bottom now at 1.4000 approx,it is better not to hold on to this gains too long as a reversal is around the corner,I plan to sell at 1.5200 which is the 61.8% fib retracement level of the last big move.I hate it when our gains are erased after much hardwork and anxiety.So be on the watch out and lets end this week in the greens,cheerio!!!!!

    Reply
  5. cfxland

    Good luck, visit this blog n others more often, they will show you how market analysis are done.

    I c from the time made dis post, price cudnt hav been at 1.5120, typo maybe.

    YT

    Reply
  6. pipsprof.

    I think the cable is capped at 1.5380 and is resuming the long trend downward move now,the broken down bearish rising wedge on the H4 confirms this,and price will aim for the larger channel bottom now at 1.4000 approx,it is better not to hold on to this gains too long as a reversal is around the corner,I plan to sell at 1.5200 which is the 61.8% fib retracement level of the last big move.I hate it when our gains are erased after much hardwork and anxiety.So be on the watch out and lets end this week in the greens,cheerio!!!!!

    Reply
  7. pipsprof.

    The big guys have jumped in to sell from 1.5100 which is 38.2% fib retracement level of the last down move,which i am also selling from, wise thing you took off your gains early,otherwise,it will just erase again,this downward move is going to be a big one,so get set every one!!!!Together we win!!!!!!!

    Reply
  8. Newbornbabytrader

    Well from my first comment i had planned to be short at 1.5120 but 20daySMA moved down to 1.5110 so i sold Gbp/Usd as per my plan when price action kissed the 20sma i.e. 1.5110. Hope things go well for me and if bad cpi uk number comes out, i ll be lot more happier. figures crossed and thanks CFXLAND for wishing me good luck. Cheers.

    Reply
  9. pipsprof.

    @Newbornbaby! as ur name suggests,u are a newbee, i think it is not too reliable to use the SMA’s and EMA’s,as they generate too much false calls,and ur trading becomes mechanical,your fib,trendlines and schochastics are better price filters.Congratulations for ur precise entry at 1.5110, you should adjust ur stop now to ur entry level to create a risk free trade,with forex,u never say never,also congrats pipscrawler for the great countertrend trade,hope we win some pips too just like you selling though.The party is on,hurray!!!

    Reply
  10. Newbornbabytrader

    Thanks pipsprof. but would like to mention one thing that fibs combined with SMAs become the ultimate resistance in down/up trends that is from my experince of last two months. where ever i find fibs laying on top of 10 or 20 day SMAs they work as firewall in my computer ( I may be wrong as too little experience ).

    Reply
  11. pipsprof.

    The big guys have jumped in to sell from 1.5100 which is 38.2% fib retracement level of the last down move,which i am also selling from, wise thing you took off your gains early,otherwise,it will just erase again,this downward move is going to be a big one,so get set every one!!!!Together we win!!!!!!!

    Reply
  12. Newbornbabytrader

    Well from my first comment i had planned to be short at 1.5120 but 20daySMA moved down to 1.5110 so i sold Gbp/Usd as per my plan when price action kissed the 20sma i.e. 1.5110. Hope things go well for me and if bad cpi uk number comes out, i ll be lot more happier. figures crossed and thanks CFXLAND for wishing me good luck. Cheers.

    Reply
  13. pipsprof.

    @Newbornbaby! as ur name suggests,u are a newbee, i think it is not too reliable to use the SMA’s and EMA’s,as they generate too much false calls,and ur trading becomes mechanical,your fib,trendlines and schochastics are better price filters.Congratulations for ur precise entry at 1.5110, you should adjust ur stop now to ur entry level to create a risk free trade,with forex,u never say never,also congrats pipscrawler for the great countertrend trade,hope we win some pips too just like you selling though.The party is on,hurray!!!

    Reply
  14. Newbornbabytrader

    Thanks pipsprof. but would like to mention one thing that fibs combined with SMAs become the ultimate resistance in down/up trends that is from my experince of last two months. where ever i find fibs laying on top of 10 or 20 day SMAs they work as firewall in my computer ( I may be wrong as too little experience ).

    Reply

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