Live Trade – GBP/USD

Filed under: Live Trades |

I have just put an order in for a live trade on the GBP/USD forex currency pair, which is the pair for the exchange rate between the Great British pound and the United States dollar.

 

Figure 1.

If you look at Figure 1, I will take you through the ins and outs of this setup, as it is a particularly good one. If you look at where price is right now, you will see that a significant level of support/resistance (marked with a horizontal green band) has been broken to the downside. This level first acted as a good area of resistance when the market was bullish, and then again when the market was bearish, perfectly bouncing off this level on both occasions. There is again a lot of bearish momentum in this pair right now, with the 8-day exponential moving average crossed well below the 21-day exponential moving average; and if anything, these moving averages are actually moving even wider apart.

 

As you can see, at the close of the session last night, a very nice pin bar formed which is penetrating and rejecting our area of support/resistance. This is a good time to put an order in, as price has retraced up, giving us a value entry. I have put an order in to go short at a 50% retracement of the pin bar (I missed this on the way up so I am looking to fill this order on the way back down), 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 our risk. As you can see, there is plenty of room to the downside for this trade to move into, as the next logical level of support/resistance is quite a way away.

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