I made a trade yesterday that I will walk you through. I didn’t post when I made it, because it was late at night, and I just wanted to relax and play video games. This trade was based on the 4H chart on GPB/USD.
When I first saw the charts, I noticed the very neatly formed rising channel, and price was sitting at the bottom of it. I first checked out correlations between AUD/USD and EUR/USD, both which are in very oversold territory:
I checked the calender for critical upcoming updates (there was none, so I’m not gona show you a picture of the calender). I checked multiple time frames of all three pairs and concluded that the overall trend has been up, and that price right now is at the very bottom of the recent rises, so I decided to BUY GPB/USD. I used a bigger stop with smaller position, because it was the first hour of London Session, which is prone to whipsaws. From looking at the chart you can see I had a drawdown (-35 pips). My stop loss was -50, because I crossed out that recent low as junk (not good enough support), and decided to pick the following one after it(which I circled). This stop loss was also covered by a pivot line that I did not think would break. Any farther than that in the next 8 hours would be considered a real break, where what was actually experienced last night was a weak false break (lack of market catalyst). So the results:
BUY GPB/USD@ 1.5619 (sl 1.5569), exited 1.5680 (W):1.8% (1.5%)