Hey all!
And, we have a new trade! As always, find below the notes from the trading journal... Enjoy!
The Daily timeframe shows a visit to a descending trendline that has been valid since the beginning of 2023. Even though the market showed a strong bullish presence when initially testing the trade level, the progress halted almost immediately and signs of failed attempts from buyers to keep the upper hand started to show in the form of several daily candles printing long upper wicks.
On the H4 timeframe (the main one used for this trade idea) we can see how the market started to print lower highs and form a support area that ended up breaking, with a recent close below the last low on said support.
Overall I consider this to be a B-grade setup that is still worth taking. This is because the entry is generated under the daily bearish trend line, forcing the SL to be placed based on the H4 levels, causing the SL to be within range of another visit to the daily trendline, keeping an overall bearish structure but stopping out the trade, also, it is taken a couple of days before GDP news for the British Pound.
However, the setup offers a risk-reward of 1:3, and the overall forecast of the monthly GDP report is positive for the Pound, which would cause a bearish movement on this pair, and would also work as a hedge for our current GBPUSD active position. Regarding profit targets, the approach remains standard, the first target sits at the last daily support area and the second one remains open in case we see a strong bearish presence when the market reaches that price zone.
And, we have a new trade! As always, find below the notes from the trading journal... Enjoy!
The Daily timeframe shows a visit to a descending trendline that has been valid since the beginning of 2023. Even though the market showed a strong bullish presence when initially testing the trade level, the progress halted almost immediately and signs of failed attempts from buyers to keep the upper hand started to show in the form of several daily candles printing long upper wicks.
On the H4 timeframe (the main one used for this trade idea) we can see how the market started to print lower highs and form a support area that ended up breaking, with a recent close below the last low on said support.
Overall I consider this to be a B-grade setup that is still worth taking. This is because the entry is generated under the daily bearish trend line, forcing the SL to be placed based on the H4 levels, causing the SL to be within range of another visit to the daily trendline, keeping an overall bearish structure but stopping out the trade, also, it is taken a couple of days before GDP news for the British Pound.
However, the setup offers a risk-reward of 1:3, and the overall forecast of the monthly GDP report is positive for the Pound, which would cause a bearish movement on this pair, and would also work as a hedge for our current GBPUSD active position. Regarding profit targets, the approach remains standard, the first target sits at the last daily support area and the second one remains open in case we see a strong bearish presence when the market reaches that price zone.
