Welcome to my trading blog. Here, I document my journey within the financial markets, including my analysis of various markets and the trades that I personally make. Join me today as I talk about the Forex pair GBP/USD and the short trade that I made in this security.
Going through RSW this morning, I saw a couple things I liked short, but nothing I really liked long. USD was near it’s recent highs, though, so it was the best candidate to me. Plus, I figured individual charts might look a little better than the basket.
When I got to this chart, price had made a strong push down, and was in the process of rallying. The push down didn’t put price into oversold territory yet, and the pattern looked like a great bear rally to me. I zoomed out to the 4 hour chart and found a target, and when I ran the numbers — entry below the lows before the rally, and my stop above the highs of the rally — I had a nearly 2 R:R so I set the entry order.
Entry
It took a while for price to trigger me in to the trade. So long, in fact, that I somewhat forgot about it (I placed the order at around 11:30am and it triggered at 2:00am). I set it before lunch, ate, cleaned up some and worked on other things for a while.
Later in the afternoon, after calling it a day work-wise, I had an “oh shit” moment, realizing that I had a live order still. I checked the chart and while it didn’t look great, it still looked tradable. Price was moving largely sideways, but was also doing a bit of rolling over to the downside.
Entry – 1.24805
Stop – 1.25
Target – 1.2442
R:R – 2:1
I adjusted my stop to a trailing stop, and left it alone for the night.
Exit
Since I left the trade alone for the night, I didn’t see how it played out until the next morning. The first thing I checked was whether or not I won. I Found my actual entry and exit prices and saw that it essentially broke even — technically closed slightly in profit.
I checked the chart and, around 1:00am price started pushing down strong, and just before 2, hit my entry. From there, price made a strong push down, a little past 1R, and then rallied. If I had been watching, I’d almost call that a basing move. That rally, though, pushed up enough to hit my trailing stop.
From there, price made another push down, but didn’t quite get to my target and as of this writing a day later, still hasn’t.
Overall, I think this was a fine trade. Maybe I shouldn’t have left the order open for as long as I did — it wasn’t intended to be an overnight trade; I expected to get in earlier — but other than that it was largely within my parameters.
I guess, if I was looking at this pair around the time it actually triggered, I probably wouldn’t have put in an entry order based on that pattern. So maybe for that reason it wasn’t a great trade. But as a swing trader, I don’t always expect the moves I’m anticipating to happen immediately.
I’m trying to be better about only trading well-defined patterns — and by the time this triggered, it was no longer well-defined — so for that reason, maybe it wasn’t a great trade. I guess this is just part of the ~60% of trades that end up being inconsequential. I’m continuing to trade regularly, too, and that’s definitely a positive. Nothing to do now but to keep looking for opportunities and continue to be a better, more confident trader.
Thanks for reading! Did you see something I didn’t here? Let me know in the comments. Or, if you found another trade today that worked out better. As always, stay tuned for more Forex Market Trades and Analysis.