Live Trade – GBP/USD

Filed under: Live Trades |

I currently have a trade in play on the GBP/USD forex currency pair, and I would like to take you through this setup right now.

 

Figure 1.

To begin with, take a 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 for this particular setup. As you can see, price has been stuck in a bit of a trading range, and I had marked in the upper and lower boundaries of this range as I saw them. You should note that although it might seem as if this lower boundary had already been broken, I actually saw this as a rejection, as price went down and then back up all in the space of two candles (similar to a pin bar).

 

However, once price broke through this level once again and stayed below this level for three consecutive days, I was on the lookout for any bearish price action signals coming off of this support/resistance area. What emerged was an inside bar followed by a fake pin bar signal at the level in question. When this pin bar closed, 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 split target of one and two times my risk.

 

As you can see, the first target, that of a risk-reward of 1:1, has already been reached, meaning that we are now effectively in a risk free trade (70 GBP has been taken as profit and the remaining lots have a risk of only 30 GBP and a profit target of 60 GBP). At the moment, this pair is moving down very nicely and price is moving closer to our target. I will update you with the outcome of this trade next week.

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