Live Trades – GBP/USD

Filed under: Live Trades |

 

There is a nice looking setup currently on the GBP/USD forex currency pair (which for those of you that are still not sure, is the exchange rate between the British pound and the United States dollar).

 

Figure 1.

If you look at Figure 1, you will see the daily chart for the GBP/USD pair, and on this occasion, this is the only chart that we will need to look at. The 8-day exponential moving average is crossed above the 21-day exponential moving average, and the pair is clearly bullish. On this kind of chart, we only really want to be taking trades that go with this bullish momentum. So, when price pulled back to an area that I had already marked in as a significant area of support/resistance, I was on the lookout for any price action signals.

 

It is also worth nothing that the area of support/resistance marked in on this chart (with a horizontal green band) goes back much further than you can see in this snapshot, and it is an extremely relevant level. Therefore, when a bullish pin bar formed that bounced off of this level, I put an order in to go long at a 50% retracement of the pin bar, with a stop loss placed just a few pips below the low of the pin bar, and a set and forget target of two times my risk.

 

Had you put this order in at the close of the pin bar, you would be in this trade and price would have come within a few pips of the target, with it looking likely that the target will soon be reached (however, I put this order in late and therefore missed the entry!). Well, that’s all that I have for you today, and I’ll be back tomorrow with another forex price action trade example.

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