Day Trade Short on Cable – No Trade

No Trade: 2011-11-10 15:55 ET

Good afternoon forex friends! I left my open orders to short Cable on past Wednesday’s trading session as I thought the setup was still valid, but maybe a little early. Today, Cable pulled back as hoped, but it looks like Dollar bulls are way too strong…

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.

PCDPOD20111109.review.png

The market continues to be focused on the European story of new leaders, sovereign debt issues, weak growth forecasts. Throw in fresh news that Chinese exports grew at a slower pace in October (+15.9% vs. +17.1% forecast), and traders continue to be hesitant to take risk while moving capital to “safe havens.”

In the 15m chart above, we can see a little bit of pull back higher as soon as the Bank of England released it’s decision on interest rates and asset purchases (no change), but it was short lived as risk off sentiment took over into the close of the European trading session. The market didn’t make it much higher than 1.5985, only 15 pips away from my orders before dropping back dow again over 100 pips. Doh! With the US session nearing a close, and the weekend quickly approaching, I have decided to close my short orders at 1.6000. No trade.

There really isn’t much to reflect on this trade–it just didn’t go my way. Overall, I got lucky with sentiment and direction, just too conservative with my entry. That’s about it.

For now, it looks like risk-off for the foreseeable future, but as always, I’m gonna stay on my toes for surprise developments in the European crisis story. The weekend is almost here, but if see any valid setups I’ll be sure to let ya know on my Twitter and Facebook pages. Stay tuned and good luck!

BabyPips.com GBP/USD Forums
Setting Newbie Expectations
My Favorite Trading Books
BabyPips.com Forex Chatroom
MeetPips.com: Pipcrawler’s Journal
Horn of Africa Hunger Crisis

Trade Idea: 2011-11-09 8:35 ET

Good morning forex fanatics! I’m watching a potential day trade setup on Cable as sentiment looks to be in favor of risk aversion, and on a technical setup forming on the shorter time frames.

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.

PCDPOD20111109.png

It’s a good day for the dollar as the resignation of Italian Prime Minister Berlusconi brought little faith back into the markets. Risk came off at the open of the European trading session (good for the Greenback), and with weak data coming from the UK (trade balance -9.8B vs. -8.0B forecast), it seems sentiment is not in favor of the Pound vs. the Dollar.

In the 15m chart above, we can see that the market finally broke below a rising trendline with a strong move. Stochastic is indicating that the near 200 pip drop may be overdone, so if we see a pull back, I’m jumping in. I threw on the Fibonacci tool, and it looks like our usual retracement levels to watch line up with a major psych number (1.6000) and Tuesday’s low. I’ll look to jump in there if retested. Here’s what I am going to do:

Short GBP/USD at 1.6000, stop at 1.6075, pt at 1.5925

Remember to never risk more than 1% of an account on any single trade. Adjust position sizes accordingly. Risk Disclosure.

This trade plan has a potential return-on-risk of 1:1, and I didn’t go for big profits as I don’t see any major catalysts for the rest of the day. And because it’s a day trade, I’m only risking 0.50% on this one.

As always, stay tuned for updates and adjustments by following me on Twitter and Facebook! Good luck and good trading!

5 comments

    • Pipcrawlerpipcrawler Post author

      My entry order was never hit.  It’s a shame because it looks like sellers are keeping this market down…

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>