Overall trend and momentum is obviously bearish on the daily chart.
There was a pin bar formed at key resistance zone yesterday, rejecting that zone nicely.
Everything lines up nicely for a short - TREND, LEVEL, PRICE ACTION.
BUT. This is a big BUT. There is this Scotland Referendum today. No one can know for sure the outcome of the poll. This kind of event can easily throw all the nice technical analysis out of the window.
No matter how tempting this setup looks like, I'm giving it a pass. To take this setup with the referendum around the corner is like buying lottery (read: gambling).
Hey Casey,
Disregarding the vote in Scotland, how would you normally enter trades on this sell signal? Would you put a Stop order just below that pinbar with your stoploss just above?
Casey_Yeo
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Depends on circumstances. I believe this is available freely on the Internet. One way is what you have already mentioned above. Another is at market after the close of that pin bar. The other common entry type is 50% of pin bar.
For this instance, I probably will have entered around 1.6300.
angmohlin
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If the National result of voting is "Yes" then the GBPUSD will collapse, on other hand if the result is "No" GBPUSD will only marginal advance few pips. All the technical charts in Monthly, Weekly and/or Daily have shown GBPUSD is in downtrend, hence, I have shorted and hopefully I am right.
Casey_Yeo
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Don't forget about the potential increased volatility which may cause whipsaw. Good luck and hope you will be smiling broadly tomorrow. :)
angmohlin
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Thanks Casey. Hopefully smiling tomorrow. Even if the National result is "No" but take into consideration of GBPUSD recently have already went up around 1.07% since 10 Sept 14. I think the upside should be limited. Hopefully I am right.
Casey_Yeo
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Usually I try not to predict the future when trading and just trade what I currently see on the chart. In this instance, what I personally think will happen is a "No" win. Price may spike up temporarily before falling given the USD strength, in line with other majors. The problem is I don't know how much it will spike up. But my best guess is that whatever spike/volatility in this pair today and tomorrow will most likely take out the stop loss from where I usually place it in this kind of setup.
angmohlin
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Thanks for your response. I am newbie just started to trade forex in recent month.
Disregarding the vote in Scotland, how would you normally enter trades on this sell signal? Would you put a Stop order just below that pinbar with your stoploss just above?