GBP

Having day traded the short term range in GBP:USD throughout much of last Week, this morning I entered a long, initially planned as a day trade but after further thought decided to give it some breathing space, albeit with one eye regularly checking up on it. The main trend is clearly down and has been for some Months but a time has come where practically every time frame is showing almost extreme levels of positive MACD divergence. This in itself is no guarantee of a reversal, but should lead to a correction of some kind, and even a weak correction is still adequate to take 100 pips or more.

After some Months without seeing a single swing trade opportunity I felt comfortable with, I've finally taken the plunge with a GBP:NZD swing long. Although its a choppy pair to say the least, the overall trend has been up for almost 18 Months now even though a glance at the chart doesn't immediately suggest that. Volatility aside, MACD and the moving averages do suggest a probable continuation of the ongoing move, which ideally will lead to a more sustained move higher.

As you'll remember in my previous post of 2 Weeks ago I gave details of 5 currency pairs each demonstrating early stages of set-ups I tend to follow before entering a trade. As things stand I've not entered trades in any of them as yet. For one of them I missed the chance as the move began overnight therefore making the risk/reward ratio a little less favourable, one I forgot about, one didn't play out as expected, one still hasn't finished the set-up and one is very close to decision making time.

An unreliable internet connection has kept me from Trading for yet another Week but suddenly today its started working fine again despite no work being carried out on my line. In view of the Weeks of torrential rain followed by a single sunny and very windy day one can only assume the problems could be weather related. One of the most common subjects I'm emailed about is that of creating a system to notify readers immediately when I enter a trade.

You may recall my recent choice to take a risky trade in AUD:NZD whilst waiting for a EUR:GBP set-up to fully play out. Obviously I could have entered both trades but on the basis that the EUR:GBP set-up didn't look quite ready for entry, and the AUD:NZD despite being far riskier did, I just went with the latter. Unfortunately for me, the EUR:GBP short would have been an instant winner, whilst the AUD:NZD one is yet to show a profit of any kind! In fact I widened the stop slightly on the AUD:NZD long on the basis that my original stop placement didn't leave enough breathing space. At present the AUD:NZD position is showing a loss of approximately 140 pips whilst the EUR:GBP trade, had I taken it, would now be showing +180 pips!

As the Week began I felt quite content in continuing to run both GBP:CAD and DAX swing long trades but the short term picture for both has changed, drastically so for GBP:CAD. Being committed elsewhere on Friday I didn't even log into my account so you can imagine the shock when I logged in after market close to see GBP:CAD that had been showing a +300 pip profit now showing a -160 pip loss! It's unbelievable how much damage can be done to a great trade in a single day, and I absolutely didn't see it coming.

Following my 3 Week break I feel I'm trading at quite a comfortable and relaxed pace continuing to hold the DAX and GBP:CAD swing long positions. DAX as with other indices seems to be going through a correction at present but its quite clear DAX remains one of the strongest Indices. As you know, my system shorted FTSE back in May on the basis a medium to long term top may be in place. Bearing this in mind it could turn out the DAX Monthly break-out candle is little more than a fake-out and I am concerned that the huge profits seen on that trade will turn to dust, but I'm quite determined to stick to the plan on this one unless I see a real break-down in the technicals.