TECHNICAL ANALYSIS GBPUSD Xmas Reversal

by admin on December 24th, 2009

GBPUSD potential reversal in time 24th Dec price level 1.59300 hit. Entry with a 30 point stop, next turn 3.1.2010 possible 400 pointer+

Have a very Happy Xmas and an even better New Year All!!!

nawaf asad says:

December 24, 2009 at 9:56 pm

hi mike first of all thank you for having me . i just wondered about the sl is too near to the price as i would ve put at least 100 pips for such a trade . anyway i will give it a try on 30 pips
merry xmas for you and family
Mike says:

January 17, 2010 at 2:12 pm

Thanks for that advice, I agree that I am setting my stops too close to the market, on second analysis of this trade the level was incorrect, usually the GBPUSD like to react at either the 110 or 100% level at the moment. The predicted move of 400 pips was very close to the actual reversal of 407 pips from the bottom, the 4th was the turn day not the 3rd, time for turns are the most difficult to predict in advance, price is a lot more reliable. I like to use small stops for two reasons, firstly it allows you to make more money when you are correct, as you set the stop by the amount you can risk on that trade. So a risk of 100 pips and a money risk of say $100 would mean I can only trade a single dollar per point. Using a 30 pip stop allows me to trade $3 per point for the same risk. I do agree though that larger stops are less likely to be hit though.