Forex Trade Update: GBP/CAD Trend Line Play

Aaand I’m out! I tried to play it more aggressively with this GBP/CAD short forex trade setup, but I got wiped out with my last position. Before y’all read on though, make sure you review my GBP/CAD trade idea.

Thanks to the bearish GBP sentiment inspired by the possibility of Scottish independence, I decided to add to my position every 150 pips and trail my stop by the same amount. After my initial short at 1.7950 and my additional short at 1.7800, I decided to close ahead of the weekend at 1.7750.

GBP/CAD 4-hour Forex Chart

GBP/CAD 4-hour Forex Chart

I still left a sell stop order at 1.7650 though, thinking that price might gap lower over the weekend if Scottish surveys continue to favor the pro-independence camp. While GBP/CAD opened lower at the start of the week, the drop wasn’t sustained and price eventually pulled all the way back up to 1.8000. With that, my stop at 1.7800 was hit!

I still managed to scrape off a few pips from this trade, as I ended up with a decent win on my first two positions and a bit of positive carry. Here’s how it turned out:

1st position: +200 pips / +0.65%
2nd position: +50 pips / +0.11%
3rd position: -150 pips / -0.61%

Total: +100 pips / +0.15%

Of course I still can’t help but wish that I didn’t add a third position and just walked away with a larger profit from my first two positions. But hey, a win is still a win, right?

I hope I can do much better in my next trades so I’m looking forward to your tips! Right now I’m looking at a larger retracement on this same pair… What do you guys think?

Cheers!

Happy time

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  • ForExchange

    Hi HappyPip,

    As you say a win is a win, I congratulate for you. A small win is still a profit, do not forget or undervalue it!

    I did not trade this setup, but some others, similar to it. My results were also similar. Many winners in the beginning of the run and later on some losers.I do not think aggressiveness is a problem if we believe in the setup.

    I still think we did something wrong. Of course after it happened everyone is smart. I think we can say lately EUR, NZD and GBP were bearish. Still EUR economy is doing bad, NZD has problems with dairy and other reports but GBP is another story. Disappointment was caused because later rate hikes, Scotland vote and some not so good reports. Still, GBP economy is doing ok, a lot better than some other economies. What I learned from this situation is that going crazy against an economy which is doing good is just not the right strategy. These falling in GBP without a single resistance had to stop somewhere. As we were in it all the time, we had to lose some at one point. Good is that stop loss helped out. I will rather scale in in EUR and NZD shorts as the recoveries are a lot tougher in those economies.

    Good luck for the rest of the week

    • Thanks for sharing your thoughts! Yep it’s definitely easier to pinpoint when the story changed in retrospect. I probably shouldn’t have banked too much on the possibility of Scotland leaving the UK and that it would be enough to change the bigger picture even before the actual results are released. Something to keep in mind in my next trades, I suppose. See you around!