This shows my reasoning for a S1S trade on Cable – 2nd attempt so to speak, after being stopped on last week’s short trade.
It’s a good thing that I was patient and waited for my limit order to get filled. Sure enough it did retrace, thanks to the US retail sales figure, and I got filled at my desired level at 5075. Of course I would have also been filled at the original level of 5096 – however I had made the decision that I should be selling at the low of Friday’s inside bar, rather than at the close of the inside bar. So I did the right thing.
Further, although the position is currently in a loss – I did have good reasoning for entering into the trade, particularly I was buying strength and selling weakness – I am trading with an edge – in the long run I will come out ahead as long as I stick to my trading rules. The outcome of one individual trade is not important. The fact that I am only breaking even after half a dozen trades – it doesn’t matter – it’s a very small sample size. I will focus on analysing the markets and on applying the STAM strategy – these are the things that I can control.
Update on my open trade: Dollar has been strengthening a little throughout the later part of the Asian session, after weakening at the close of the US session. Price traded a high of 5168, less than 30 pips from my stop but has now weakened back to 5100.
Thus there are two events that could potentially huge GBPUSD impact – it’s therefore very likely that my trade will be off the table by the end of the session, unless the comments trigger dollar strength.
Looking at the D chart of Cable, my trade does not look good right now – price has just been moving sideways – it has digested three big figures over Monday and Tuesday but has more or less trade between 5050 and 5150. So overall the trade is looking pretty sh*t really. We will just see how it plays out. Remember that I am probably only going to be right one times out of three with my standard STAM strategy.
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