Day trade
Trade view / 11 August 2016 at 9:50 GMT

UPDATE: GBPCAD burns bulls not bears

FX Consultant / IFXA Ltd

The original trade view expected that the strong support in the 1.6990–1.7000 area would hold and that the combination of a bounce in GBPUSD and lower oil prices would cause GBPUSD to rebound.

Oil weakened, but not enough to overcome renewed bearish GBPUSD sentiment.  GBPUSD couldn't get any traction above 1.3100 and resumed the downtrend as traders concluded that the worst is far from over for the UK and Brexit. GBPUSD crashed below support at 1.2950 and GBPCAD sank, triggering the stop loss for a 0.0093 point loss.

This trade underscored the danger of making assumptions. It assumed that the support level would hold, despite lacking confirmation from a topside break in the intraday downtrend line.

Note: The second buy order at 1.7070 was not triggered.

Original Parameters:

Buy ½ GBPCAD at market (currently 1.7010) and the balance on break of declining trend line on 30-minute chart. Currently 1.7070.

Stop: 1.6925

Target: 1.7250

Time horizon: 4 days

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
11 August
alki alki
Thank you Michael. I took your assumption as valid and my trade closed at a small loss. No problem though, i am sure both of us learned something from this one. Keep up the good work.
11 August
Michael O'Neill Michael O'Neill
Thanks alki. The smarter way to have traded this idea was only to buy if the downtrend line was broken. Had I did that, we wouldn't have got stopped.
11 August
Michael O'Neill Michael O'Neill
because we wouldn't have been long in thelace.
11 August
Michael O'Neill Michael O'Neill
I meant in the first place


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