Monday, November 2, 2009

GBPUSD—Interesting 3-Hour Chart

Last Friday I opened two shorts in GBPUSD, one at 1.6555 and one at 1.6530. Currently they’re in profit at 173 and 148 pips respectively as of 6:40AM EST. Obviously I’ve moved my stop to a profit stop.

I wrote that the pair might fall back to its channel top on the daily which is what it did. I won’t try a long here although if I had no positions on I might do so. First, I’m reluctant to close two trades in profit. Second, if it falls back into the channel the potential profit is great. Since I have both trades profit stopped I have no risk.

The three-hour chart shows the daily channel (the black lines). The point where the red and blue lines come together shows a symmetrical triangle. Breakout is more likely to be upward since that continues the trend. The up sloping, blue trend line which intersects with the down sloping, blue trend line could prove a resistance point which might offer another sell opportunity. The pair broke below the blue trend line but RSI has not done so. The last few candles on this chart had lower shadows which could be indicating the pair is rejecting lower price levels. There’s lots of interest on this chart. If I wasn’t short and in profit, I could make a case for going long. Here’s the 3-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.