Friday 16th October – Cable – +39 Points

October 18, 2009

FX Trading

pw20091016 gbpusd 5 min break south

 

Ok, nice to end the week on a positive note.

After a couple of days of strong bullish moves cable starts to run out of steam during the asian session.

Price heads down to a previous level of support from which it bounces hard (at point2).  I believe that this is the last push north before it rolls over and that it’s a sucker play.  I figure that after a few days of strong gains traders are taking their profit to finish the week with a smile (we’re all human after all).  Also Goldman Sachs said the prvious evening that they were buying Sterling.  These days as soon as I hear an announcement that a big player is buying then I am looking for opportunities to sell.    Call me contrarian or just call me a sceptic, whatever it is I don’t care.

So when price drops strongly after making its push north at point 2 I’m ready to get short.  So when price starts to break support at point 1 I go short @ 1.6321 with a stop loss at 1.6367 (5 points above the recent high at 6362) which is also my biggest stop loss for these type of trades but its at a sensible place. My Target is 6230, 5 points in front of the daily pivot.

Price drops quickly and strongly to the 1.6300 handle.  All the wicks are to the southside indicating buying pressure at 1.6300 so I am ready to cover at a moments notice.

Price breaks this level of support and continues down strongly.  I’m using a one bar reversal stop-loss as price is moving down quickly. My stop loss is being trailed after each bar and when price bounces at point 3 I am taken out on the trailing stop at 6282 for +39 points.

Learning points:

1. Once again my entry was quite aggressive but I was very comfortable with that.

2. Did I once again miss out on a chance to add to my position?  In this case yes.  My task is to create and add a pyramiding strategy that helps me make the most of these occasional good runs.

3.  Did I trail my stop to close?  Hmmmm overall I’m comfortable in trusting myself to do the right thing.  Price here was dropping quickly once the 1.6300 level broken.  Iwas quite happy at the end of the trade to have gained 39 pips income.

Overall a proftable week.  Time to keep focussed, learn from my mistakes and keep prgressing next week.

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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!

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One Comment on “Friday 16th October – Cable – +39 Points”

  1. melissamehta Says:

    You’re a contrarian sceptic, and it seems to be working for you.

    Like

    Reply

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