Tuesday 13th October – Cable +24 points

October 16, 2009

FX Trading

pw20091013 gbpusd 50percent pullback

Sorry I’ve not been posting however I’ve been off sick and also attending a course over the weekend.

 Now back trading and here’s a trade from this mornings move on cable.

 Price had fallen during the evening but started to rally in the early morning.  As we got towards the 7am open I saw that price had rallied back into the 50-62% fib retrace zone.  Along with a double top forming on the 5 min and small bars after the last big push bar I was looking for a short opportunity at point 1.

 When the 1 min chart showed divergence I went short at 5791.  I placed a stop at 5810 above the bar and round number.

 At point 2 price had dropped strongly and had hit the ascending triangle.  I felt that price could continue but I decided that were price to bounce off the trend line and resume its north bound direction then I would close at entry for break even.

 Price did not bounce and dropped further.  Because price had dropped so hard and fast within three bars I decided to use a 1 bar reversal stop so my stop was trailed down to 15867 (always 5 points above the last bar).  The 1 minute chart was showing divergence and also starting to make higher lows and higher highs so I expects a retrace of some sort.  I was literally just pipped out on my trailing stop for a total of +24 points.

 Learning points:

 –          My stop maybe seen as too tight.  This was purely because price was collapsing so fast that I felt it might bounce back hard off a support level.

–          This would have been another chance to add to my trade.  Something that I need to write up very clear rules for.

 As always any feedback is appreciated.

About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

View all posts by FXTraderPaul

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