I know, I know… I may be beating myself up for rushing into shorting this position for fear of missing a big move, but do you think I should add?
Short GBP/JPY Trade
In my defense, my initial trade idea featured a long-term head and shoulders pattern with a potentially wide target, so I just made sure my R:R was good to go before jumping in!
That was before I soon realized in my Weekly FX Crosses Watch that I would’ve been better off waiting for a pullback to the broken neckline to catch a much better entry level.
Bah! I still can’t stand to look at this chart. It hurts my eye!
Anyway, the good thing is that I’ve set a really wide stop for this breakout entry so the position ain’t looking too bad at the moment. Brexit jitters are resurfacing after all, and it looks like the U.K. cabinet showdown next week might get messy.
For now, I’m looking to keep this trade as is, but I can’t help but wonder if I should try to improve my R:R by averaging up on my entry price with another small position. I probably should be adjusting my stop a tad lower to reduce the overall risk, right?
As you can see from the chart above, the pair is testing a make-or-break level at the short-term descending trend line and 147.50 area of interest. This lines up nicely with the 61.8% Fib, too!
Stochastic looks ready to head south, which suggests that pound sellers could return soon. I’m thinking more Brexit-related arguments could wind up dragging this pair down before the EU withdrawal bill vote on June 12, but so far risk-taking is also weighing on the yen.
What do you guys think? Should I just sit on my hands or make these adjustments on my trade?
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