Forex Trade Review: GBP/USD Short

I didn’t get the pullback higher I was looking for to get bigger in this trade, but the alternative wasn’t so bad: a drop to my profit target in GBP/USD!  Here’s a quick forex trade review.

Original Forex Trade Idea: Shorting GBP/USD Ahead of U.K. Data

GBP/USD 1 Hour Forex Chart

GBP/USD 1 Hour Forex Chart

In my trade adjustment to reduce risk/maximize gain on Wednesday I was wondering if Cable still had legs, and it looks like my question was answered! Thanks to weak economic readings from the U.K. (house prices and construction data) and a surprise positive read from U.S. retail sales today, Cable sellers came in droves to push the pair lower without the pullback I was hoping for to 1.5850. It was pretty much a straight shot lower all week for the pair, eventually hitting my take profit orders at 1.5650.

Total: +200 pips/ +0.50% gain

Looking back, probably the only thing I could have done differently was to add my second position on manually after the break of the strong support area around 1.5800. To be honest, I’m still not that comfortable with adding on to positions on breaks, even though they often turn out to be great decisions when there is a major catalyst supporting a move. I don’t know if that’s something I’ll ever get comfortable with, but I do know I’ll continue to work on making it a mechanical part of my risk management plans.

Besides that, I’m glad to get a profit into the weekend, and I  continue to have a bearish bias on Cable, so it’s something I’ll possibly look at getting back into next week.  Until then, thanks for checking out my blog and have a great weekend!

  • ForExchange

    Hi Pipcrawler,

    I liked your reasoning and setup in the beginning, your risk and money management. You played it a safe and good way. I also took the trade but with the comdolls and they are still open. I also pulled my SL to protect profit.

    In the intermediate term I am bearish with GBP. What about you? I am not asking especially the USD/GBP particular pair but altogether UK economy.

    As I follow your posts, if you mind I say a personal opinion about your uncerntainity in scaling in: I think you do make market orders for opening the positions but you rarely make a market order for the purpose of scaling in. Maybe you could look into the issue a little. It is not the first time when you had a great idea about scaling in but missed the move completely.

    I wish you a good weekend and drink some beers from your gain!

    FE

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