Last week was a successful week for me financially in the markets and so after a long weekend away in Edinburgh watching the rugby I was ready to ease myself back into the markets this morning.
Yesterday looked like it was a cracking day on the Forex markets selling Sterling. I hope readers helped themselves to some of that sterling gravy!
With yesterdays trading and the FOMC announcements this evening I was expecting a dull session. However my trades set-up and they matched my Relative Strength Analysis (find out more about that here) so I took them as per my plan with some minor Money management adjustments. I was looking at shorts on GBPUSD, GBPCHF and GBPJPY.
It was a decidedly dull start to the morning and it was so slow that I wandered off for some breakfast. I felt the trades were unlikely to trigger and I expected them to be pulled at their alloted time.
Well I was wrong! At approx 0720 somebody pulled the plug on Sterling and she dropped hard. My orders on GBPUSD and GBPCHF were triggered. The cable trade is outlined below:
1. Cable drops hard and triggers my short entry at 1.5036. My stop is at 1.5051 and my target is 1.4991
2. Within a few short moments my trade hits its break-even point
3. Not surprisingly price bounces off the 1.50 handle. My plan is to watch on the 1 minute chart and close early if necessary. In this case there is no need as price slices down through 1.50 and hits my target at 1.4991 for +45.
My trade on GBPCHF followed Cable and reached Break even point swiftly. It then decided to hang around before returning north to stop me out for a scratch trade. Similarly GBPJPY triggered my short order south but was defiantly lagging the other two sterling currencies. It was a real laggard which I watched hawk-like. Normally ‘the beast’ runs hard so I am always wary when it does not lead the other sterling currencies. Anyway it went about 20 points positive but it didn’t show any real enthusiasm and so I decided to bring my stop to Break-even a few pips early. By this time Cable had already hit its targets so there was no point in me trying to be greedy and eke out a few more points. Along with all the other currencies they reversed hard and I was taken out for a break even trade as opposed to a losing trade.
So three trades: 2 scratch trades and 1 income trade. Overall that’s +45 points for the morning and a nice 3:1 R:R on the trade. Let’s see what the rest of the week holds for me.