GBPUSD

My short was stopped at breakeven. In the overnight session many of the currency pairs have soared, including GBPUSD.

Am I sorry I didn’t stay in my long trade from two days ago that made me 265 pips? After all, I’d be up 462 pips at the high this morning. Well that would be nice, yes. But remember how I exited that trade? I set a profit target that looked reasonable given that the pair might be ranging. The profit target was achieved while I slept. Near the top of what could have been the range I tried a short. When it was possible I moved my stop to breakeven. There’s nothing I did wrong given my information and my interpretation of my information. I didn’t lose money. All one can do is play the market where it is with the information that is available at the moment. Clearly, something has changed. Ergo, I need to change. But that change wasn’t evident yesterday morning. So am I sorry? No. That trade is yesterday’s trade. Today is a new day.

I wrote yesterday that the blue lines I’d drawn on the three-hour chart should act as strong resistance (1.6126/60) and that I’d short at these levels. A look at the charts this morning at 4:40AM EST says, “Not yet.” GBPUSD is pushing higher; momentum is strong. The high is 1.6198.

A three-hour chart I posted in this blog on October 2d had an orange line at 1.62, indicating this would be a “difficult” level. It has poked its nose above this level as I write. Now I need to see what happens next. If momentum starts to slow down, if candles begin to show indecision on lower time frames, I may sell. If not, I can’t buy until there is some sort of retracement. Regardless, the chart will eventually provide a clue. Here’s the three-hour chart:

As I wrote the above, the five-minute chart is starting to show some hesitation. I’ll be watching it.

Here’s the three hour chart.

© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.