Partner Center Find a Broker

Boy am I glad I took a chance on this GBP/AUD short forex trade setup! Of course there are a couple of points for improvement but overall, I’m happy with how I managed this one.

As I mentioned in my initial trade idea, I thought of shorting at market prior to the release of the U.K. CPI figures. Most of the inflation readings came in below expectations, supporting my downside bias, but I only risked half my usual position size ahead of the Chinese data dump the next day.

GBP/AUD 1-hour Forex Chart
GBP/AUD 1-hour Forex Chart

I was able to short at the 1.9300 major psychological level, which was right around the 50% Fibonacci retracement level and broken support area. I set my sights on the previous lows near the 1.9000 handle but stayed ready to exit early in case fundamentals don’t turn out in my trade’s favor.

I also briefly considered cutting losses when price popped higher after China’s retail sales and industrial production reports posted bleak readings then re-entering prior to Australia’s jobs release. Then again, I figured I’d sit tight while price is staying below the Fib levels since I have a pretty wide stop at the 1.9600 mark anyway.

Fortunately, Australia’s employment readings beat expectations and led to a sharp selloff for GBP/AUD earlier. Unfortunately, I wasn’t quick enough to add to my short position!

But a win is still a win, right? Even though I only risked 0.5% of my account on this forex setup and I’ve got just a 1:1 return-on-risk, I ain’t complaining!


Happy time

Other Popular Articles:   

Comdoll Trading Kit EUR/NZD TradeWhat is the STA strategy?Q1 2015 in Review

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.