Live Trades – GBP/USD

Filed under: Live Trades |

I had four live trades yesterday which resulted in a cumulative loss of -1.7% on my bank. However, what I want to do today is to illustrate just how tenuous the line between success and failure is in the forex markets, and how the margins for error are so narrow.

 

Figure 1.

Let’s take a look at the trade on the GBP/USD pair that I took (see Figure 1). This was a trade on the four-hour chart. There was a very good intra level of support and resistance that price had bounced of with a pin bar (highlighted in green). My plan was to enter this trade 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 of two times my risk (with 0.7% of my lots exiting at the 1:1 RR level). As you can see, this should have been fine and a nice, profitable trade. The problem was, however, that I put the order in around an hour after the 4-hour candle closed.

 

I would normally have put this order in as soon as the candle closed, but unfortunately, I was not able to. Therefore, my order was missed on the way down, and as it was a night time order, it was filled on the way back up (with the large bullish candle) and the stop loss was hit. Had I put this order in just an hour earlier, it would have been a profitable trade; but as it is, it is a loss. It would have been a 0.6% profit for the four trades instead of a -1.7% loss. Had I not been using the new conservative profit taking system, it would have been a 2% profit on the bank (compared to a 1% loss as it stands). Such is life…

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