Live Trade Result – GBP/USD

Filed under: Live Trades |

I talked about a trade setup yesterday on the GBP/USD forex currency pair, which is the pair for the British pound and the United States dollar. Unfortunately, this trade has been unsuccessful, but as always, I would like to talk you through the ins and outs of this trade anyway as a learning exercise.

 

Figure 1.

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 chart that we will be looking at for this particular setup. Just to recap, the pair had been moving down nicely, with the 8-day exponential moving average crossed well below the 21-day exponential moving average, and the chart visibly moving down from left to right. The pair had also crossed through a minor area of support/resistance (marked with a horizontal green band), and then formed a bearish pin bar. It was at this pin bar that 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 target set of two times the risk. Unfortunately, the order was filled and the stop loss was hit for a 1% loss on the bank.

 

However, I do not feel that this was a trading mistake, and over a long series of trades like these, we should come out on top. Prior to this bullish move, price had not closed above the 8-day EMA for some time, and this marks a significant change in market sentiment. The last two or three of these pin bars would have been successful, so if you had taken them all, you would have come out on top. Unfortunately, this one was not to be.

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