Thursday, 26 November 2020

Trade #1: GBP/USD

As you now, I’ve been trading GBP/USD quite a lot recently. In fact, it’s the only instrument I’ve been trading. These are my thoughts going into this trade. I was short a very strong bear breakout on Monday. It reversed up strongly in a fairly tight bull channel. The following morning, the market rallied strongly only to reverse down again. However, the reversal down just became a test. The market reversed up again. Remember, on the next I sold my shorts. It was painful but the market was strong. Now, the market made a HL, which is a sign of strength. We also have to remember that overall GBP/USD is in a bull trend, so it is understandable looking through those lens. Yesterday, we again rallied in the US session. Yesterday, I sold the double top, and I got 1% in reward. Despite being in an overall trading range, we are getting HL’s and as of yesterday, and during the overnight session, also a HH. As for my trade today, the market was relatively weak but it contained a fair amount of buying pressure. Take a look below:

As you can see, the bulls bought each new low, and there was a lot of buying pressure throughout the channel. Here is the overall picture on a 1-hour chart:

The bulls have been getting HL’s and buying higher and higher, so the buying pressure is there. I expected this to continue happening. Here is where I bought:

I bought the last bar you see on the chart above. Wedge bottom is bull flag. I used a wide stop, thinking that it might not the last low. Here is what happened afterwards:

I want to hold this trade for a break of the top. I hope that is going to happen. Also, if the bulls starts getting momentum up, I will be looking to add to my trade.

I was stopped out on the next day. Next time, I should probably tighten my stop once I have 2R in profit. Damn.