Trade Closed: 2010-08-19 12:43 pm ET
Well, that trade didn’t last too long as volatility continued to push Cable down and up during today’s Asia and European trading session.
During the Asia session, the pair continued to grind lower after my entry at the retested rising trendline. It fell enough into the morning European trading session where the first profit target was hit, half of my position was closed, and the stop was adjusted to breakeven.
Unfortunately for my trade–but great for the UK–UK retail sales surprised everyone with positive reads. Needless to say, this didn’t help my open short position, and within the next hour my remaining open position was stopped out at breakeven.
1st half: +100 pips
2nd half: +00 pips
Total: +0.50% gain
Looking back on this trade, it would have been prudent to close the trade down right after the positive news on UK retail sales was released. Something to think about on my next trade.
So, small gain for the weak, and if you’re still short bias–which I am as that rising trendline still held as resistance today–then you may want to reconsider entering short again after re-evaluating price action.
Stay tuned for my next trade idea, good luck, and thanks for checking out my blog!
Trade Idea: 2010-08-18 2:40 pm ET
Good afternoon Forex players! I see a purely technical play setup as Cable breaks a rising trendline. Does this mean sellers are taking control and ready to push the pair lower?
Technically, we see a lot of things going on with support and resistance. First, I drew a rising trendline connecting the higher “lows” during the recent uptrend. It looks like that area of rising support is failing as the trendline was broken yesterday. Today, after finding support at 1.5500, the pair rallied back up to test the trendline and the major resistance area just under 1.5700. I think this area will hold, and I look to short here at market.
My stop will be above the resistance area around 1.5700, and I will target the next major support area highlighted on the chart around 1.5200. This will give me about a 3:1 reward-to-risk ratio trade if I take off some profit at 1.5500.
Short GBPUSUD at market (1.5612), stop at 1.5712, pt1 at 1.5512, pt2 at 1.5212
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
We’ve got retail sales and public borrowing data from the UK coming up in the next trading session, both of which is forecasted to disappoint and potentially help my trade out. From the US, we’ll be closing out the week with Initial Claims, Philly Fed Survey, and Leading Indicators data during Thursday morning’s US trading session. All of which are forecasted to do better…check out the details on our Forex calendar!
That’s it for now! Stay tuned and good luck!