About Pick of the Day

Pick of the Day Author

At the end of each trading day, I will find what I believe is the best looking short term trade setup for the upcoming trading day. If you're a forex newbie, it can be tricky in the beginning trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology of price movements so you can learn to analyze your own charts and trade on your very own. Trades will be posted by 1 am ET, Monday through Thursday evening.

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February 2008

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Pick of the Day: GBP/USD - Close Trade

Posted 08:43 26 February 2008 by Pipcrawler

Close Trade: 2008-02-26 08:43

Regardless of weak UK economic data, Cable rallied high on a broad based USD sell off and hawkish inflation comments from Bank of England officials. Further, buying support is evident even after a surprisingly strong US PPI number. With Consumer Confidence coming up, most likely to disappoint, I am going to close my trade at market to avoid further risk.

Close trade at market (1.9735).
Total: -70 pips
-0.70% loss

Trade Idea: 2008-02-25 19:40

PoD Chart

For tonight's "Pick," we're going to take a nice chart setup on Cable as the pair seems to have found resistance just under 1.9700.

On the chart, we can see resistance at the downward sloping trendline and stochastics are trending lower out from overbought territory.

Short GBP/USD at market (1.9665), stop at 1.9765, pt1 at 1.9565, pt2 at 1.9375

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

We do have economic data coming out in the UK during the Euro session and US data (most notably PPI) coming out during the US session, so we may see a bit of volatility in the upcoming trading sessions.

Stay tuned for updates...good luck and good trading!

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Comments (9)

great, I shorted too. got a good fill at 9690. target1 is 9590. I'll manually cover the 2nd half after it hits my target 1. can you tell me the reason you put your target 2 at 9375?
iheartmoney | Posted 20:55 25 February 2008
I'm in here also.... along with happypip's trade. Normally I wouldn't roll with two from you guys at the same time but I was eyeballin' this one my self.
gadamj | Posted 22:16 25 February 2008
hi guys. this should not be taken as a spoiler but as contingency trade plan... i'm actually on this trade also. shorted at 1.9680. however as you can see we are actually at the end of 'almost clean' double bottom formation. If the 4hr candle closes above 1.9765 (which is also the SL on the original trade idea), maybe you guys want to reverse your position and go long. with target 1 @ 1.9830. and target 2 @ 1.9950 and target 3 @ 2.0100. Let me know what you guys think..
babyfxtrader | Posted 00:01 26 February 2008
I see what you are talking about. My exposure on this one is very limited so I will be interested to see if we get a double back.
gadamj | Posted 00:24 26 February 2008
Pipcrawler.. what do you think?
babyfxtrader | Posted 02:46 26 February 2008
Hey guys... thanks for the comments! Looks like we saw a broad based US Dollar sell off during the Asia/Euro overlap... the area (1.9700 - 1.9730) may hold as resistance, especially if PPI and other US data comes in dollar positive. If it does, I think we will see the pair move back to about 1.9675. If we see USD negative numbers, a breakout higher is highly possible on overall USD sentiment. My "guess" is that we will see higher PPI and weak Consumer Confidence, so we may see a bit of choppiness during Euro/US overlap. We'll wait and see.... good luck!
Pipcrawler | Posted 07:11 26 February 2008
mixed news today. looks like PPI supports us a little. Market is getting slow now. we might see a decent pull back. hopefully
iheartmoney | Posted 09:33 26 February 2008
hit SL
prambors | Posted 12:03 26 February 2008
If you guys decided to go on contigency plan i talked about earlier, we recovered the lost from original trade and PT1 has been reached. If you guys are not on the trade yet. Fear not, as it is likely the pair will come down again to resistance line turned support line. Entry idea for those not ont he trade yet. Long @ 1.9775. Any more ideas?
babyfxtrader | Posted 14:32 26 February 2008

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