GBP/USD Future Trade Idea - Pound in limbo ahead of Brexit
Thesis >
GBP/USD seems to be in a macro bearish/depressed market structure, but is ranging at the moment and seeking direction. Trade idea is to short the local resistance at the beginning of March, and keep an eye on fundamentals that could push it out of this range (a referendum or an agreed deal on Brexit). Otherwise expect it to hit the local top and start falling - my target would be 4% below to the local bottom, just to be safe and risk-averse.
Best case >
You could consider adding to this trade if the UK looks set for No Deal, as you'd expect there to be the beginning of a new downtrend. In this case I would reassess the trade and Risk/Reward, and plot a new short setup.
Worst case >
Get stopped out just above the local top, at 3%. Any such rise would surely be short-lived, unless the UK is able to secure a clear economic direction during the first 2 weeks of March. The risk is there however especially due to mounting political pressure.
TA >
GBP/USD looks to be range-bound since August 2018, when a strong downward current lost momentum. RSI is rarely able to go above local resistance when it crosses into bullish territory, not does it plummet much from the 50-mark. The 200 day EMA has acted as resistance since May 2018, it is support-turned-to-resistance.
Details >
Date and time: Future trade idea (1 March 2019)
Trade no: P01
Platform: None
Type: Paper trade, short
Position size and risk management: 1000GBP, 30GBP risked
Emotional state: Tired, fatigued
Market: GPB/USD
Setup and indicators: Shorting the local resistance. Horiziontal S/R, 200 day EMA, RSI
Timeframes: 1D chart
Stop-loss: 3% above local resistance
Take-profit: 4% below resistance
Review date: 1 March 2019
Relevant past trades: N/A
Record-keeping: Record the outcome of trade in paper trade journal
GBP/USD seems to be in a macro bearish/depressed market structure, but is ranging at the moment and seeking direction. Trade idea is to short the local resistance at the beginning of March, and keep an eye on fundamentals that could push it out of this range (a referendum or an agreed deal on Brexit). Otherwise expect it to hit the local top and start falling - my target would be 4% below to the local bottom, just to be safe and risk-averse.
Best case >
You could consider adding to this trade if the UK looks set for No Deal, as you'd expect there to be the beginning of a new downtrend. In this case I would reassess the trade and Risk/Reward, and plot a new short setup.
Worst case >
Get stopped out just above the local top, at 3%. Any such rise would surely be short-lived, unless the UK is able to secure a clear economic direction during the first 2 weeks of March. The risk is there however especially due to mounting political pressure.
TA >
GBP/USD looks to be range-bound since August 2018, when a strong downward current lost momentum. RSI is rarely able to go above local resistance when it crosses into bullish territory, not does it plummet much from the 50-mark. The 200 day EMA has acted as resistance since May 2018, it is support-turned-to-resistance.
Details >
Date and time: Future trade idea (1 March 2019)
Trade no: P01
Platform: None
Type: Paper trade, short
Position size and risk management: 1000GBP, 30GBP risked
Emotional state: Tired, fatigued
Market: GPB/USD
Setup and indicators: Shorting the local resistance. Horiziontal S/R, 200 day EMA, RSI
Timeframes: 1D chart
Stop-loss: 3% above local resistance
Take-profit: 4% below resistance
Review date: 1 March 2019
Relevant past trades: N/A
Record-keeping: Record the outcome of trade in paper trade journal
Trade closed: target reached:
And there you have it, my most successful set-up and prediction so far.
Everything went as expected.
My review date was 1 March, but this played out 2 weeks earlier than expected.
Everything went as expected.
My review date was 1 March, but this played out 2 weeks earlier than expected.