Live Trade – GBP/USD

Filed under: Live Trades |

I currently have a live trade in on the GBP/USD forex currency pair (the pair for the British pound and the United States dollar), and I would like to talk you through this rather simple setup right now.

 

Figure 1.

Figure 1.

To begin with, take a good look at Figure 1. This is the daily chart for the GBP/USD pair, and it is the only timeframe that we will need to look at on this occasion as all of the information that we need is contained within this chart. The first thing that you should notice is that the chart is visibly moving down from left to right, and it has been for some time. The 8-day exponential moving average is crossed well below the 21-day exponential moving average, and you will also notice that the 8-day exponential moving average is also acting as something of a support area, as price has not been able to close above this moving average for some time, despite piercing it on a couple of occasions.

 

I have also marked in on the chart a previous swing low, which can also act as a support/resistance zone (marked in on the chart with a horizontal green band). I was therefore looking for price to retrace back up to this area, where I was on the lookout for any bearish price action signals. Therefore, when a bearish pin bar formed right at this level, I put an order in to go short at a 50% retracement of the pin bar, with a stop loss placed just a few pips above the high of the pin bar, and a target set of two times the risk  – which takes us down to just above the latest swing low point. This is a nice logical level to place our target, and we will see how this one progress over the next couple of days.

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