It’s a no for this trend play!
Thanks to a better-than-expected U.S. retail sales report, investors felt more confident to expect the Fed to start tapering as early as the first quarter next year. Unfortunately for me, this excited the dollar bulls, enough to pull Cable to my stop loss level. Right now I’m looking at a 75-pip, 0.24% loss. Boo!
One thing I learned from this trade is that I really, really have to be careful about putting on technical trades ahead of major news events. At the time I thought that the 61.8% Fib had held and that 1.6400 would become a solid support level. I probably should have just taken off my position and considered entering at market after the report was released.
Another lesson learned the hard way! Have you guys encountered trades like this before? What did you do at the time? Let me know! 🙂
Ready for another trend trade? I know I am!
A few minutes ago I spotted a possible retracement play on GBP/USD‘s 1-hour chart. Right now Cable is bouncing off not only from the 50% Fib, but also the 100 and 200 SMAs as well as a rising trend line. Oh, and I think I’m also seeing a bullish divergence in the chart!I’m keeping my risk contained for this trade though. For one thing, we don’t really have another U.K. report due for the rest of the week. Over the next trading sessions, the pair will probably move to the tune of USD sentiment (hello retail sales!), taper expectations, or risk appetite.
This is my trading plan for now: I risked 0.25% at market (1.6395) and placed an 80-pip stop, which is below the bottom weekly ATR. I don’t have a profit target yet, but I’m thinking of adjusting my stop losses ahead of tomorrow’s U.S. retail sales or the weekend.
What do you think? Is this something you would take?
Thanks and XOXO!
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