Live Trade – GBP/USD

Filed under: Live Trades |

I currently have an order for a live trade on the GBP/USD forex currency pair (the pair for the British pound and the United States dollar), and although this order is as yet unfilled, I would like to take you through the setup right now.

 

Figure 1.

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the GBP/USD pair. What you can see is that the chart has been moving downwards in a bearish trend, with the 8-day exponential moving average crossed below the 21-day exponential moving average, and the chart quite visibly moving down from left to right. I have also marked in on the chart a good level of short-term support/resistance (marked with a horizontal green band). As you can see, this level has already been penetrated with pin bars and long upper and lower shadows on no less than eight occasions already. So when price retraced back up to this level and formed another pin bar on the daily chart, it seemed like a good place to put an order in.

 

What I have done is to put an order in at the break of the low of this pin bar. This is a slightly more conservative approach than usual, as I want this confirmation before entering this trade, but it still leaves a good risk-reward scenario of 1:2, with the stop loss placed just a few pips above the high of the pin bar.

 

Figure 2.

Figure 2.

If you look at Figure 2, you will see that an early trade could have been made on the 4-hour chart, with a nice pin bar at our area of support/resistance allowing a 50% retracement entry, and a risk-reward of 1:3. However, unfortunately, I have decided to only trade off of the daily chart for the time being this month, as this is where more of the high probability setups seem to lie. Nevertheless, this intraday setup is also worth noting.

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