[TW] 5-16-2011 - GBP/USD (Long) by jenesaisquoi

Trading Discussion
1

GBPUSD, daily

gbpusd2.jpg700×417 37 KB

Long or Short: long

Entry Point: market, 1.6285

Stop Loss: 1.6170

Profit Target/s: 1.6500 and 1.6700

Reward-to-risk Ratio: possibly 2.7:1

Risk percentage: 1.0% (2 positions, 0.5% each)

Indicators used:
-MACD (12,26,9)
-100 SMA (red line)

Trade Rationale:
-support at .618 fibo, rising trendline and 100SMA
-MACD returned to 0
-Lots of big UK reports (CPI, claimant count, MPC minutes, retail sales) coming next week. I think they can get GBPUSD to turn around, especially with CPI coming out. PPI posted way above forecast when it came out last week, so this could translate to a strong CPI too.

Trade Adjustments:
If price hits 1.6500, I’ll close one position. My 2nd profit target is the most recent high at 1.6700. I might exit early at signs of reversal (MACD back to 0, reversal candles). Also plan to move my stop to BE once I cover my risked capital (+115 pips).

2

If, and this is a big if as the British mood does seem to be pretty sour, GBPUSD gets to 1.6285 I would give it a go. I can’t see it happening until much later in the day, though.

I think that, if I do enter, my stop-loss will be quite a bit higher.

London opened 20 minutes ago and we’re sitting at 1.6204

3

Ouch I think your stop may be too tight for a trade idea that uses the daily chart!