GBP/USD (Short)

I had an opportunity to trade yesterday but I did not update the blog because I was not very confident of its success. But it turn out very well today and I shall share how I entered this trade. If you look at the picture below you will find pseudo sort of resistance line I drawn. The left most candle is what is known as the master candle stick. To learn more about master candlesticks, you can refer to this link. I am using an hourly chart in this setup. Mostly, I sense apprehension in the markets and this was used together with the master candle stick method to trade. I entered short at 1.5000 with only half position. I set my stop loss at 1.6000 and initial profit target 1.4800. But the trade soon turns out to be better than I anticipated and I adjusted my target to the recent low of 1.4400. So far I 've got a neat paper profit of 400 pips and I also adjusted my stop loss accordingly to 1.4700 in case things should turn around too fast. Bernanke's speech was an anticlimax. Banks need more bailout??? Good thing I entered this trade early. It is widely anticipated the ECB will cut rates again so I will hold on a little longer to this trade and see if there is any spillover effect to the Cable.








Update 1
The pair went down to a low of 1.4480 early in the morning but soon rallied to 1.4580. I decided to close the trade at this level for a neat profit of 420 pips. I do not usually trade the Cable because it is extremely volatile. This is the first trade I did with Cable on half position and it proves that I can possibly profit from it given the correct situation. Will try to take a break following this small success. I might just get overconfident and enter trades recklessly. I shall update the blog on the finer points of charts and dealing with emotions during trading.