Good morning,
Yesterday I entered a sell on GBPUSD and I'd like to share my thought process before I entered this trade.
On the higher timeframe we can see the Pound has been melting these past few weeks as a result of the FED starting their tapering process, concerns over the new Omicron variant, the BOE not looking to change their monetary policy after previously saying they are looking to hike interest rates before 2022 (this is all very bearish for the pound and has been the driving force behind this bearish price action)
On the lower timeframes we can see price is rejecting the yellow supply zone which so happens to line up with 1.32750 (quarter level theory). Every time price comes up to this level, we see a lot of selling pressure come into the market.
As price came up for the second time to this zone to form a double top, I scaled in and placed a sell limit @ 1.32662 just below the previous high with my SL @ 1.32866 just above the supply zone / psychological level with an extra 10 pips for breathing room - I was very confident price was not going past this zone, with my reasons stated above. If I wasn't too confident, I would've waited for price to show me selling pressure with a bearish engulfing, wick rejection, or any other type of bearish candlestick formations.
This trade offered me a 3.2:1 RRR and played out very nicely. I was in this trade for just over 13 hours, with my TP getting hit during the early Asian session. Unfortunately I forgot to publish the trade idea for the benefit of you guys but I'll make sure to do this with every trade going forward.
Hope you like the read, let me know your thoughts / opinions on the pair.
Cheers,
Yesterday I entered a sell on GBPUSD and I'd like to share my thought process before I entered this trade.
On the higher timeframe we can see the Pound has been melting these past few weeks as a result of the FED starting their tapering process, concerns over the new Omicron variant, the BOE not looking to change their monetary policy after previously saying they are looking to hike interest rates before 2022 (this is all very bearish for the pound and has been the driving force behind this bearish price action)
On the lower timeframes we can see price is rejecting the yellow supply zone which so happens to line up with 1.32750 (quarter level theory). Every time price comes up to this level, we see a lot of selling pressure come into the market.
As price came up for the second time to this zone to form a double top, I scaled in and placed a sell limit @ 1.32662 just below the previous high with my SL @ 1.32866 just above the supply zone / psychological level with an extra 10 pips for breathing room - I was very confident price was not going past this zone, with my reasons stated above. If I wasn't too confident, I would've waited for price to show me selling pressure with a bearish engulfing, wick rejection, or any other type of bearish candlestick formations.
This trade offered me a 3.2:1 RRR and played out very nicely. I was in this trade for just over 13 hours, with my TP getting hit during the early Asian session. Unfortunately I forgot to publish the trade idea for the benefit of you guys but I'll make sure to do this with every trade going forward.
Hope you like the read, let me know your thoughts / opinions on the pair.
Cheers,