Live Trade – GBP/USD

Filed under: Live Trades |

I currently have a live trade on the GBP/USD forex currency pair, and I would like to provide an overview of this setup right now.

Screen shot 2013-08-07 at 08.47.15

If you take a look at Figure 1, you will see the daily chart for the GBP/USD pair, which is the only timeframe that we will need to look at for this particular setup as all the information that we need is contained within this chart. What you can see on this chart is that there is a very nice area of support/resistance at the top of the chart (marked by a thin, red, horizontal line), and that price had recently once again approached this level. So, when price reached this level, and then bounced off of it, forming a nice bearish engulfing pattern in the process, I decided to put an order in to go short.

 

My short order consisted of a sell limit order to go short at a 50% retracement of the pin bar, with an initial stop loss placed just a few pips above the high of the pin bar, and an initial target of six times the risk – giving us a massive risk-reward scenario of 1:6. Since then, the order has been filled almost perfectly, before moving back down, and putting us in profits of around two times the risk. At this point, I have moved the stop loss to breakeven, so that we are effectively now in a risk-free trade. We will monitor this one in the coming days, and exit the trade as and when price action tells us to. But at the moment, it seems prudent to stay in this one, as there is a lot of bearish momentum at present and this could go down a fair bit more before the bulls wrestle back control.

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