Pick of the Day: GBP/USD – Close Open Orders

Close Open Orders: 2007-02-16 08:25

We have housing and inflation data coming out soon, and these our potentially volatile reports. The market has moved about 50 pips away from our orders, so we will cancel open orders to avoid event risk.

Trade Idea: 2007-02-15 23:43

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We saw a sell off in Cable after the weaker than expected retail sales numbers early yesterday. Against the dollar, we saw a strong move from 1.9680 all the way down to 1.9500. According to stochastics, this run may be out of steam, so we will see if we can get a quick profit from a possible retracement off the strong move.

Here’s a trade idea:

Buy GBP/USD at 1.9550, stop at 1.9530, pt1 at 1.9570, pt2 at 1.9590

Remember to never risk more than 1% of your account on any single trade, so please adjust your position sizes accordingly.

We do have event risk in the morning with the monthly US Producer Price Index numbers, Housing Starts, and Consumer Sentiment. Depend on price action during the Euro session, we will make trade adjustments accordingly. Good luck and good trading!

  • clam0391

    These comment spaces aren’t used much. I think that is a pity, especially in view of the work Pipcrawler does in providing these tips every day. So if it’s OK with you all, I intend to make comments quite frequently, for a while at least, even though I am new to Forex trading and know next to nothing about technical analysis and even less about fundamentals.

    So here goes: regarding AUD/USD, I personally don’t see it going down just yet, but if it goes up much further it will meet the trendline of the downtrend on the hourly chart at about .7870. Then, presumably, it will probably go down, perhaps as far as 0.7640 if the support from Oct/Nov 2006 does not hold. Is that a fair assessment?

    Regarding USD/JPY, I liked pipcrawler’s idea but split my trade into three, going short at the market at 120.29 and taking profit at 119.30 for 99 pips. I went short with a limit order at 119.60, but because it was bedtime in this part of the world, I set my stop at 119.59, went to sleep and was stopped out for 1 pip profit. I find one of the most difficult things about forex trading is avoiding setting a stop too close. How can I avoid repeatedly making this mistake?!
    The third part of my trade was a limit order to sell at 119.00 with pt at 118.50, but it hasn’t been triggered yet, as the support from January is still operative. I’m in hopes it yet come to life – only 15 pips to go.

  • pipin

    Thanks for the tip, Pipcrawler. You’ve been a reliable guide-post in my forex education.

  • clam0391

    These comment spaces aren’t used much. I think that is a pity, especially in view of the work Pipcrawler does in providing these tips every day. So if it’s OK with you all, I intend to make comments quite frequently, for a while at least, even though I am new to Forex trading and know next to nothing about technical analysis and even less about fundamentals.

    So here goes: regarding AUD/USD, I personally don’t see it going down just yet, but if it goes up much further it will meet the trendline of the downtrend on the hourly chart at about .7870. Then, presumably, it will probably go down, perhaps as far as 0.7640 if the support from Oct/Nov 2006 does not hold. Is that a fair assessment?

    Regarding USD/JPY, I liked pipcrawler’s idea but split my trade into three, going short at the market at 120.29 and taking profit at 119.30 for 99 pips. I went short with a limit order at 119.60, but because it was bedtime in this part of the world, I set my stop at 119.59, went to sleep and was stopped out for 1 pip profit. I find one of the most difficult things about forex trading is avoiding setting a stop too close. How can I avoid repeatedly making this mistake?!
    The third part of my trade was a limit order to sell at 119.00 with pt at 118.50, but it hasn’t been triggered yet, as the support from January is still operative. I’m in hopes it yet come to life – only 15 pips to go.

  • pipin

    Thanks for the tip, Pipcrawler. You’ve been a reliable guide-post in my forex education.

  • PipGoddess

    I am new to trading the currency. I am trading the USD\JPY and my trades are going in the opposite direction. Do you think that the yen is going to run back up as it did in the ending of January and the 8th and 9th of February?

  • PipGoddess

    I am new to trading the currency. I am trading the USD\JPY and my trades are going in the opposite direction. Do you think that the yen is going to run back up as it did in the ending of January and the 8th and 9th of February?

  • http://www.intuitrader.com intuitrader.com

    “I find one of the most difficult things about forex trading is avoiding setting a stop too close. How can I avoid repeatedly making this mistake?!”

    Setting a stop too close is tantamount to not giving enough space for your trade to work for you. The normal volatility of a currency is 100 pips, if one puts the stop less than 100 pips is vulnerable to being stop out. One can put stop at 100 pips with the nominal value of the stop not exceeding 2% of the account balance. The other equally important point is not to widen the stop when the currency is nearing the stop. Let it stop out and move to the next trade.

  • http://www.intuitrader.com intuitrader.com

    “I find one of the most difficult things about forex trading is avoiding setting a stop too close. How can I avoid repeatedly making this mistake?!”

    Setting a stop too close is tantamount to not giving enough space for your trade to work for you. The normal volatility of a currency is 100 pips, if one puts the stop less than 100 pips is vulnerable to being stop out. One can put stop at 100 pips with the nominal value of the stop not exceeding 2% of the account balance. The other equally important point is not to widen the stop when the currency is nearing the stop. Let it stop out and move to the next trade.