GBPUSD—hourly chart diamond pattern

I have closed out my short from yesterday at -16 pips and my one from 1.5007 is at breakeven. The pair may well head down but there's a rough diamond pattern forming on the hourly chart. When a breakout takes place from a diamond, the movement tends to be fast. Let's see what happens—it could be a stop and reverse will be in order if it breaks above. Perhaps I'll have time to add to my short position if it breaks down. I still tend to believe the pair is going to drop but the market will tell me soon and now I have no risk.

Here's the hourly chart:












© Dianne Fecteau, 2010. 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.