Entered short trade on GBPCHF, also pending short order on GBPUSD

More details and chart snapshots to follow later today (or at the start of tomorrow).

Note to self – it would be better much better if I post comments about why I took a trade, as soon as I have entered the order into the market – as I am able to take screen shots of how everything looked at that time – it will also allow me to sept back and double-check my reason for entering into the trade.

(Comments added Wed) Reasons for short GBPCHF trade:

  • S1S Environment
  • Retracement on D chart – inside bar on D chart on Monday on both 4H and D chart.
  • Thanks to the negative news on GBP (Manufacturing Production data), the forming candles on 4H and D chart turned into huge bearish pin bars
  • Both pin bars poked through the upper lines of the channel that I had drawn onto the chart last week (from which price had previously been strongly rejected several times)
  • I was trading mediocrity v strength – for that reason I was using only 0.7R
  • I entered a limit order below the low of the previous closed candle on the 4H chart (at 4405)
  • So I was in the correct STAM environment, there had been a pullback, and there was now bearish PA, and I was trading post-news, which is acceptable.
  • I entered the stop above the high of the previous 1H candle (at 4469)
  • On the downside – I was not waiting for the 4H candle to close – I was trading on the basis of what the candle looked like as it was forming – is that not a good symptom
  • I am satisfied that I traded according to my rules

GBPUSD Trade

  • S1S environment, trading the strongest currency against a weak one – I had been looking for a setup on this pair – USD is very strong, GBP is weak and has momentum going against it on all fronts
  • Reasonable pullback on Monday on D chart – some 100 pips – and it formed an inside bar
  • Likely that Tuesday’s candle would form a bearish engulfing candle (it did actually do this, although it did have a bit of a low tail on it) – this was providing the bearish PA for the trade
  • On the downside – as for the GBPCHF trade, I was not waiting for the candles to close.
  • Entered limit order to sell near the low of Monday’s inside bar (at 4865) and placed stop around the top of Monday’s inside bar (at 4965)
  • I am satisfied that I traded according to my rules

 

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