Live Trade – GBP/USD (update)

Filed under: Live Trades |

I would like today to provide you with an update of the setup that I discussed yesterday on the GBP/USD pair. Just to remind you, this was an inside bar setup and we wanted to get in on the long side (see Figure 1). This order has now been filled at the break of the mother candle of this inside bar, and we are now marginally in profit, with a wide stop loss and a risk-reward scenario of 1:2. However, I will manage this trade and take profits if price action tells us that the bullish move is running out of steam. One way we can do this is by moving the stop loss up to the previous low of the day.

 

Figure 1.

Figure 1.

What is really interesting about this bullish move is that, if you look at the candles from the last nine trading days, you will see that each low of the candles is higher than the previous low. And even though three of these nine candles are black bearish candlesticks, the lows were still higher than the previous low the day before. Higher lows only means one thing – the market is bullish and there is some decisive momentum to the upside. Therefore, one strategy that we could take could be to keep moving our stop loss up to the low (or perhaps just a few pips below the low) of a completed candle, and we will then exit the trade when a lower low is finally made. This will likely signal the end of the current bullish trend and a change of market sentiment, so it would be a good time to exit. However, I will not tinker with this during intraday moves, and will wait for a full daily candle to close before making any judgement calls.

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