Trade Closed: 2007-06-20 23:20
The second half of our position was closed at breakeven this evening. We managed to collect +20 pips from our trade. In retrospect, closing the position earlier would have been the best move. I recognized the move was out of steam, but I HOPED it would go up further. This brings me to something I read by Ari Kiev, “See things as they are instead of comparing them to what you know…” Wise words my friends. Forex markets are volatile and we have to constantly go with what is there…Just thought I’d share that.
1st Half: +20 pips
2nd Half: +00 pips
Total: +20 pips
Trade Adjustment: 2007-06-20 08:10
We had some Pound bullish data during the Euro trading session with net mortgage lending stronger than expected and the M4 money supply growth at the highest since Oct 2006. The market’s focus was on the MPC meeting minutes which showed 5 members voted to hold rates, while 4 members voted to hike rates 25 basis points.
Cable rallied on today’s data, and it managed to break through 1.99 and stay above. Our trade was triggered long at 1.9910, and we easily hit our first profit target at 1.9930. Half our position was closed and the stop on the remaining position was moved to break even. Stay tuned!
Trade Idea: 2007-06-19 23:40
We have got another unexciting day ahead of us, as there are no major events in the next 24 hours besides UK data – most notably the MPC Meeting Minutes. The Meeting Minutes should give us an insight as to who voted for, or against, a rate hike. The market is expecting a 7-2 vote. Anything different and we could see traders jump quickly into Cable.
As we can see from the chart, the markets are loving the British Pound once again on interest rate hike outlooks, positive housing data, and a positive interest rate differential in favor of the Pound.
So, I am bullish on the pair which is why we will go long either on a retracement or a breakout above the previous high:
Long GBP/USD at 1.9910, stop at 1.9870, pt1 at 1.9930, pt2 at 2.0000
Long GBP/USD at 1.9800, stop at 1.9760, pt1 1.9830, pt2 at 1.9900
Remember to never risk more than 1% of your account on any single trade. Adjust your position sizes accordingly.