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Gbp/Usd trade from last night.

11/19/2010

Here’s the great thing about trading. If something doesn’t pan out with your plan, you change your plan or sit things out. I decided to sit things out. Last night we looked at what looked like a pretty good trend line break on gbp/usd. We also broke the 50% back of the recent move down. I was hoping for a little further run, before a pullback to retest the trend line and go long – possibly up to the .618 replacement. The longer I watched this pair, the less convincing the break looked. In the two options, breakout or fakeout, we experienced a fakeout.

So, since this was a swing setup, we need to be patient on our entry. Had I decided to go long, I would have taken my time and waited for a decent pullback. The pair bounced off the 200 sma on the 5 min chart. This is the same place the 15m. 55 sma came in. I often like these areas for short term buy – support / resistance areas. And, in this case we could have seen as much as 45 pips. Certainly enough to move break even or take some profit.

Had I bothered to stay up another 2 hours last night I would have seen this short setup on the 15 min chart. Both price and later the 5 period sma broke the 55 sma, confirmed by breaking the 100 sma and also broke the 200 hr sma at about the same level. Had I taken a break of the 100 hr sma this trade would currently be up about 70 pips. That’s the great thing about forex, there’s always another trade.

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From → Trades

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