Live Trade – XAG/USD

Filed under: Live Trades |

I currently have a live trade in play on the XAG/USD pair that looks like it might reach my target at any minute. For those of you that don’t know, this is the pair for silver and the United States dollar.

 

Figure 1.

To begin with, take a look at Figure 1. This is the 4-hour chart for the XAG/USD pair. What you can see here is that price formed a very nice bearish pin bar at a significant area of support/resistance (which I had marked in on the daily chart with a green horizontal band, and this obviously looks much bigger on the 4-hour chart). At the close of this pin bar, 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 simple target set of two times my risk.

 

As you can see, this order was filled very nicely and price has since moved down very well. It might look as if the target has already been met – and indeed it has been very close. However, this chart is based on the sell price only, and as this was a sell trade, then we have to essentially buy it back to close the trade. Therefore, we have to take the spread into consideration (which is currently 40 pips with my broker). Therefore, the chart will have to move 40 pips below my target in order to reach my target, if that makes sense. The spread is something that you should always remember to take into consideration, as it can have a major effect on your trading and your profit/loss figures. Well, that’s all for today, and I’ll be back tomorrow with more on this trade and others.

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