Update on today’s GBPUSD Short Trade set-up

In light of what is currently happening with the majors, we would know that virtually any “buy-dollar” trade set-up, from a day-trade perspective, is doomed.

I took a Short GBPUSD trade, but was fortunate to manage the trade well enough to close at break-even (2pip profit). Maybe explaining what I did might offer a few insights.

On the Hourly chart above, I identified a nice confluence of resistance levels around fib. 61.8% ret. @ 1.6489. I also noticed a very distinct most recent Hourly swing low @ 1.6509, which was closer to the fib. 78.6% @ 1.6520 (I apologize for not highlighting it with a horizontal line). I decided to place my Limit Order around the most recent Hourly swing low @ 1.6509 – mainly to enjoy a high reward:risk while trying as much as possible not to miss out of any potential beautiful trade.

On the 15min chart above, as you would observe, price moved upward and met resistance almost at the same level of the most recent Hourly swing low @ 1.6509. Automatically, my Limit Order was filled. As priced instantly reversed downward, I saw an opportunity to quickly turn the trade to a no-loss trade.

In the absence of a well formed reversal candle formation on the 15min chart, I waited for the close of the second bearish 15min candle, and concluded that if there would be any major downward price move, the two 15min bearish candles (that formed around major resistance levels) were strong enough to initiate the downward move. Hence, with a two-lot position, I closed half of my position @ 22pip profits; then moved my Stop Loss to 20 pips above my entry level, which was 15pips above the 15min candles (that included my broker’s spread). That automatically made the trade a no-loss trade with a “windfall” profit potential of 186pips.

Alas, today wasn’t my lucky day.