This thread is a sequel to my previous one on how I lost $120
After recovering 45% of my loss since last post, this happened
I loaded the cable daily chart to illustrate me present situation
Here is the one hour chart to show you the exact moment I got in, and how much of an expert I am at picking the wrong entries in this business
I will close this trade after posting this, maybe cable will retrace or even reverse 
GBP/USD has been in a determined downtrend from the beginning of June. The other important GBP-based charts are also bearish and although EUR/GBP is not very bullish its certainly pushing that way.
I think you correctly identified an entry level alright, but trading a reversal against such a trend was bound to be low probability. Its not wrong to trade reversals and the counter-trend winners on this pair would have been dramatic be dramatic but you have to have deep pockets and a thick skin.
With the benefit of hindsight, I suggest the clue lies in the Daily chart. A tiny bearish candlestick with long wicks which means there is a conflict between bulls and bears, but just favouring the bears.
As for the 1hr chart, you are definately going against the trend, market sentiment, and fundamental analysis - which has a strong dollar and a weak pound. Really, only one outcome probability.
As you are well aware, Cable trading is influenced the most by fundamental actions.
BTW, what leverage are you trading?
Benefit of hindsight…lol… you can say that any day of the week and you won’t be wrong. The charts look so clear after the damage has been done, don’t they?
There was no clue in the daily chart! At the moment of entry, it was going for a bullish retracement of at least 10 pips
That tiny candle you are pointing at was not there at time of entry. Was I supposed to close the trade at the formation of this tiny bearish daily candle? In my previous thread, a similar thing happened. The moment I closed the first order and opened a second one in the opposite, market still went against the trade significantly.
Anyway , the trade has been closed now and I am willing to bet cable will see above 1.3400 today
Thats the thing with trading it is so mental. You close out positions early as you think itll turn you let losers run and then you get confirmation bias. The only way is to have rules if they’re met enter and have trade management to look after the rest. Once you enter your job is done and its time to accept what happens next. Easier said than done sometimes i know lol
I make it a rule to only follow the D1 trend when I take a D1 trade. I look at a handful of EMA’s and see where price is to them and where they are to each other. I will only take a long trade if price is above the 50EMA and 100EMA and if the 20EMA is also above the 50EMA. GBP/USD has been a sell for me since mid-June and it still is. I am short GBP/USD and in the money. This is of course not hindsight.
I missed that one. I’m waiting for it to hit resistance, I’ll be waiting a while.
Before that however, I’m waiting for the bear trend to slow down so I can go long and trade the counter trend.
I would not say it is a wrong entry. It looked good in the daily chart to go long. A bullish engulfing candle formed right after a doji candle in the daily chart, which states that the buyers may push the price in the minor charts. The H1 candle came out as a strong bullish candle too. However, your stop loss should have been set right below that H1 hour consolidation support. There is no point of carrying an entry with excessive loss.
Yea agreed on this
Yeah, all my trading rules were met. This happens too often I have become an expert at it. Guess what? Cable has gone above 1.3400 today like I said in my 1st post
The red line is 1.3400
If I still kept my position open, GBPUSD would have been trading around 1.3200 by now
I have done something similar in the past and it did not work. I got piss poor results
That’s another experience I have had. Whenever I place stop loss the way you suggested, it always gets hit. Always. Even though the market continues in the direction of my order afterwards, that SL must be triggered.
Hi @nu_bee,
Thanks for posting. It is threads of this type that are the most valuable to all traders. It takes a humble spirit to post failures, so you are well on the way to success.
May I respectfully suggest that you take a break and re-analyze your trading rules because they seem to not make sense to me. Looking at GBPUSD, the trend is short on monthly, weekly and daily. This is an unusual occurrence to have all 3 timeframes in agreement, and although the price action is close to the bottom of a channel that has been developing since May, it doesn’t mean it is higher probability to go long against the trend. Did you use a confirmation indicator and if so what was it?
Firstly, it is my belief that statistical back testing has shown that trend following has a higher percentage chance of being right than wrong, and trend reversal trading has a lower chance of being right than wrong. I have not proved this myself by personally backtesting, but I take it as a generally accepted fact.
Secondly, from your previous line “After recovering 45% of my loss since last post”, either you have had a few ten baggers, or you are still using a high percentage of your bank for each trade (your risk per trade, or number of concurrent trades). What % of bank are you risking at any point in time? How much of your bank is at risk with concurrent open trades?
I hope these questions are constructive and cause you to reassess whether your trading rules are giving you a fair chance of approaching a positive edge over time.
Just a further thought on reversal patterns.
Bulkowski says maybe the most relevant thing about reversal candlestick patterns in his “Encyclopedia of Candlestick Charts” - which is to play the reversal patterns which mark the end of a counter-trend correction of a trend. Which means, don’t buy on a bullish reversal pattern in a downtrend, it will rarely work.
Just a little suggestion, maybe have a think about FA and include it in your TA rules - figure why I talk about Gbp likely selling last weekend for the incoming week.
Had a quick look at your long - I’m guessing around my red line (could be wrong).
The market is a market of orders - sells and buys - price therefore must ‘seek’ those orders - else there will be no market.
Price sought out the missed orders at the 3600 level (orders will sit a ‘levels’ where they are more likely to be filled) - and given the recent negative Gbp fundamentals the majority of orders would have to be sells.
Think about entries - a guess is that you use market orders - maybe figure buy/sell stops instead. That way you enter with direction - good chance you will have to cancel many orders but there is no loss - try it out next week on Gbp - enter long ahead of price on Monday, maybe say around 10.00 am
IMO, this is the best tactic in trading GBP/USD. Yesterday, Friday, showed two minor (profitable) retracements when scalping buyers succeeded in delaying the bearish long term trend - which is continuing.
One further thought from Bulkowski on candlestick patterns.
He lists the most reliable 9 candlestick reversal patterns he found -
• Above the stomach
• Belt hold, bearish and bullish
• Deliberation
• Doji star, bearish
• Engulfing, bearish
• Last engulfing bottom and top
• Three outside up and down
• Two black gapping candles
• Rising and falling windows
Of these, 8 depend on gaps at the open. This of course is unrealistic in forex, apart from the Asian Monday open after the weekend, and impossible intra-day. Maybe its no wonder text-book candlestick patterns don’t seem to perform very well in forex…
Know what caused that - answer here (report came out 10.00am Friday:)
Sterling rises 0.5% vs dollar as EU says N.Ireland deal possible | Reuters
Wouldn’t be so sure re the bearish trend continuing in the week ahead at least.
So it’s Monday and I decided to look at cable to see if it continued the down trend. It has currently retraced 56+ pips from the price I closed my trade at a loss and this retracement began immediately
The red line shows my close price, the red arrows shows the hour I closed that trade
This is why I don’t make money from forex
