Long GBP/CAD Trade Review

British pound bulls were slapped down on a combination of increased risk aversion and comments from BOE Governor Carney!  GBP/CAD dropped and took me out at my adjusted stop!

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

GBP/CAD 4 hour forex chart review

GBP/CAD 4 hour forex chart review

A lot going on for sterling traders today, and like my main man Pip Diddy commented on in his London session recap, it was thanks to risk aversion and mainly, Bank of England Governor Carney’s speech in Davos this morning.

The short story is that he re-iterated what was said in the BOE meeting minutes released this week, that hitting 7% in the unemployment rate is not an automatic trigger for an interest rate hike.  He also mentioned that recent pound strength could hurt U.K. exporters.  We saw a sterling sell off on the event, with GBP/CAD dropping from its high’s around 1.8550 to its current levels around 1.8270.  The market hit my adjusted stop at 1.8350 and took me out of my trade. 

Total: +271 pips/ +0.91% gain 

Not a bad return, but I gave back a third of my profit on that pullback from 1.8550.  I don’t usually follow the speeches in World Economic Forum in Davos carefully, so I think the one thing I could do differently in the future is to be more aware of this event and adjust risk accordingly to avoid a strong negative reaction like what we saw today after Carney spoke.  I don’t think they’re usually market makers, but as the saying goes, “be ready for anything!”

I’ll continue to watch this pair to see what it does between 1.8100 – 1.8300.  If it consolidates and support behavior appears, I may go long again.  If it doesn’t, and the sterling selloff finds legs, I just may go short.  We’ll see what happens.

That’s it for me today.  Thanks for checking out my blog and have a great weekend!

 

  • http://www.alleycat.be alleycat

    271 pips, i have a hard time seeing the flaw in that . fx is unpredictable, to make this in one trade is an all round win, you can not hold all possible factors in the human brain at once, not the best supercomputer could do that at this time, let alone the fact youd need to find someone who could actually program at that magnitude.
    I see the need to reflect on actions past to learn from them, its a key component of social studies competences as well apparently but you should get hung up on that when you just succeeded imo. Last friday … emerging markets doomsday ? proved that very well, i dont think any of the ‘experts’ expected the dollar to make a dive at that time … i think a lot of the time the big money is just waiting for a valid excuse to sell off at a high because they have ‘responsibilities’ or else the rate at which people panic is somewhat equidistand to the amount of money they have if you were to plot it out idk …
    you made a wad of cash there if you trade according to classic strategy with at least decent capital, you should be having a ball before you have a ponder

    imo … its not my place to dictate how other people should ofcourse, im just saying …

    • Pipcrawler

      Thanks for your thoughts alleycat! I don’t see a flaw at making profit…whether I win or lose, I try to focus on the process and whether or not I need to make a change or if I executed the plan well. I can’t control the market, but my processes and execution are the things I can control.