03/12/09 – EURGBP Part 3 – Closure, +99, +70 & +22

December 3, 2009

FX Trading, Trading Set-ups

Well having had a couple of days of good runs in this currency I was always aware that the trend could turn.  So I was not surprised to see that price had gone sideways overnight.  It was sat on the 4hr 200 EMA and sat under the 60 Min EMA.

Late on yesterday my scalp short from 9128 had automatically moved its trailing stop to 9058. Profit locked in and it was just chugging away.

Naturally I wanted to let the trades run as long as possible and give them every chance to breath but the sideways movement allied with building bullish divergence left me feeling that today would be a bullish day.

So my plan was to expect price to retrace north and wait and see what it did at resistance.  If it bounced convincingly I would add.  If it cruised through resistance then I would close.  Nice and simple.

As you can see from the charts my fears were realised during this mornings session.

1.  As mentioned price started going sideways in a range after closing to within 20 points of my final target.  The 15 min chart had a very nice ‘Halle Berry’ Divergence set-up that alerted me to the likelihood of the next move being up.

2.  My scalp short position was taken out here on an auto trailing stop at 9058 for +70 points profit.  Also when price closed above that line of resistance I was preparing myself for the eventual covering of my swing position.  As stated my plan was to see how price responded at resistance levels.  If it bounced then I’d add. If it continued north I would close.

3. Price did not bounce but continued north and so both remaining positions were closed at 9085 for +20 and +2 accordingly.  Why +2?  Well I tend to move my stops to just in front of my entry points in order to cover spread/commissions.  You don’t have to it’s just one of my quirks.

So overall this was a nice profitable trade.  Firstly the scalp position was taken out for +70 points which was pleasantly surprising.  I expected to get about 20 points and be done with this.  I should add that it is documented in my Trading Plan that I can allow intra-day trades to run on, but only if they are in profit like this one was.

Secondly the main swing position was closed for +26, +53 and +20 for a total of 99 points.  Finally the add-on position was closed for  +10, +20 and +2 for a total of 32 points.  Overall my position in EURGBP harvested me a nice 201 points profit.

Now the interesting thing is that some readers will look at my actions and will say that I closed my positions too late, that upon seeing a range of congestion with divergence I should have just closed up my position and taken the profits.  There will have been another bunch of readers who will say that I closed too early and should have just left my position running in the hope of gaining ever greater profits.  There’s no real answer to that here.  At the end of the day I have to make Trading decisions that I can stand by and act upon with discipline. I made a plan at the start of the day and stuck by it.

Mostly I’m pleased that I was able to sell the line on my scalp trade and also add to my position on my swing trade.  Those are the positive points for me to take away and use in my trading going forward.

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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!

View all posts by FXTraderPaul

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