Live Trade – GBP/USD (result)

Filed under: Live Trades |

The live trade that I outlined yesterday has unfortunately hit the stop loss. This is the nature of forex trading I’m afraid – it is usually two steps forward and one step back (or two steps forward, four steps back, and three steps forward as the case may be!). It is a part of trading that we all must get used to, and we must unfortunately see losing trades as the cost of doing business.

 

Figure 1.

If you look at Figure 1, you will again see the daily chart for the GBP/USD forex currency pair, and I will talk you through why this trade failed.

 

Just to recap, I’d put an order in to go long at a 50% retracement of the bullish candle at the top of the chart that had closed through a significant area of support/resistance. The idea here was that there must have been a lot of bullish momentum in the pair for it to break through this area of resistance, and as such, I wanted to be in on this bullish momentum. However, the pair has since moved downwards and become bearish, first taking out my stop loss, and currently, a bearish pin bar is forming (although it should be noted that this candle has not yet closed and as such, it could look very different by the end of the trading day).

 

This breakout strategy is a strategy that I have recently added to my trading arsenal, and as such, it is a strategy that has not yet proved to be profitable over the long term. I have had some good results with this strategy, so I will keep using it and keep an eye on the results for now. However, if over the long term it proved not to have an edge, then of course, I would cut this trading strategy and instead, wait for retracements to the level of support/resistance that has been broken through, and wait for any price action signals to confirm a continuation of the trend.

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