I took this trade on 9/16/2020 and because the BOE Meeting i got stopped out for my full amount of 1% (still trading demo account). I still think there is potential in this trade where i could easily get 2:1 return. Do I take the trade again or drop and move on? I’m not revenge trading i still think there is upside on the setup.
I’ve been on a bit of a loosing streak 7 out of 9 loosing trades, however I’m still have a positive R:R with winning ratio of 48%. I know my profits are not wow, right now my focus is on the process. How do you get over this slump? Was it all beginners luck?
Bad luck @tjaffer, sometimes these things just don’t work. Sometimes they do work but the increased volatility and/or increased spreads due to BoE meetings or BoE meeting minutes releases torpedo a good position - at leats they’re on the calendar.
I’m happy to throw in a few other points to consider.
GBP/JPY is also known as “The Beast”. It can be highly volatile and unpredictable. There’s no profit at all in flat prices, but this pair is highest risk of all the majors.
All the GBP charts look bearish for GBP. My rough and ready currency strength score for GBP is 0-7, making it the weakest of the 8 major currencies, so a GBP short is a logical starting point. That said, NZD scores 7-0, AUD scores 6-1 and JPY comes in at 5-2, so GBP/JPY is a good match-up but not the best.
Finally, these two currencies have more politically going on than most. The longest-serving Japanese PM resigned recently: his replacement is experienced but already 72 and the country’s economy is adrift. UK political issues for the GBP are shorter-term, so more dangerous. The UK government caused the recent downleg through its Internal Markets Bill. Unsurprisingly the market saw this as additional Sterling risk and has pushed the GBP down for 10 days. A political resolution could start a bullish move within hours.
Thanks @tommor the additional pointers are very helpful.
You mentioned that that the GBP charts look bearish based on your charts and currency strength. How do you measure currency strength? is there a formula?
I’m looking at GBP/NZD and it appears to be bullish since 2017, does your opinion differ? are you bearish bc of the current news around brexit?
Are there specific sites you rely on for news or is it just a general search on google?
I give each of the 8 major currencies a score depending on the slope of my favourite EMA on their charts. So an upwards slope for the base currency gives a bullish score of 1, a downwards slope gives a bearish score of 1. The counter currency simultaneously gets a bearish score for a bullish EMA and a bullish score for a bearish EMA. From the 28 major pairs this gives a possible maximum score of 7-0, a possible minimum of 0-7.
Right now, USD scores 7-0, AUD scores 0-7. so the best trade using this view would be a short AUD/USD. Currently I’m using the 20EMA but the MA period depends on your strategy and trading style.
If the slope is moving upwards for the base currency, it will be a bullish score but if the slope is downwards, it will give a bearish score. Speculation will help you to trade better.
