The countertrend trade on GBPUSD

22 feb - gbpusd daily chart

As you can see from the chart, the GBPUSD has been in an extremely bearish market. However, when I saw the bullish pinbar, I knew my trade would be a countertrend trade where I would have to be extremely careful, ensuring that I don’t end up losing pips.

With my last few trades, I’ve been holding out for the longer trades but they’ve not been working out for me so I’m going to split my trades… I’ll report on the ones where I have had my most success (ie daytrades) on Twitter but will be monitoring and/or trading the swing trades on a separate account. I’m not sure how yet I’ll report these but will keep you post.

Anyway, the pinbar was my queue to enter and I had an initial target of 15400 – round numbers are always something to watch for and the next obvious one was 15300. The 1 hour chart is below:

22nd Feb 2013 - GBPUSD 1 hour

As with countertrend trades, you got to watch where the market can turn and go with the underlying direction. In our case, you can see that the trend failed to go higher above 15300 and made a double top. From here, I thought I wouldn’t take any chances and get out.. I got 55 pips!

If you look at the chart, you will see that the market soon dropped like a lead balloon but we got our profits!

 

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Category: Forex trader, Forex trading, money, Trading


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