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
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!