I opened an account with FXCM in late 2015 and the largest draw-down I incurred was -30% (this wasn’t very long ago). It’s now time to work it up back to break-even. I had three great trades last week where I made 10% and reduced my drawdown to -18.5%. I started with $1,000. To figure out how much is in my account now, you are free to do the math. I am all about transparency here, and I do not intend on making claims about trades that never happened. I will always show proof in the form of screenshots in order to amplify my desire to be as transparent and honest as possible, both to myself but also to any potential spectators.
This week I am looking to trade the following markets: GBPUSD, USDCAD, UK100, ITA40, Copper & NGas.
I will post charts of my analysis as I take the trades. However, here’s a preview on my GBPUSD analysis:
Starting off with the daily chart, we see that the market has tried to break and close above the high of the bullish candle highlighted in green. That is an indication of the market’s desire but inability to break higher. Why is that, you ask? It’s actually quite simple, and we’ll see why in just a minute. First of all, we have to get two things settled and out of the way. Firstly, the market has a tendency to sometimes pull back to the last high before a strong move to the upside. On the above chart, that last high has been marked with a red dotted line. Secondly, if the market breaks a support/resistance level without re-testing the level as resistance or support respectively, it is likely to return to that level at a later date. Let’s have a look at what I mean:
Do you see the high marked with a blue horizontal line? Do you see how the market just smashed through that high without re-visiting it? This essentially indicates to us that there is a lot of liquidity at that level (because potential longs from that area after the breakout were never filled) and thus, we want to wait for the market to hit that level before we get long. Less advanced traders are likely to try to buy up the support level around 1.4300 and get caught in a losing long position until the market hits the blue horizontal line and then rallies.
I’ll be putting my money where my mouth is. I’m going long with a pending order at 1.4242 and placing about a 64 point stop. The idea is to see the market rally to the 1.4500’s.