Tuesday, January 12, 2016
Crazy GBPUSD Countertrend Trade
The GBP/USD forex pair has been getting absolutely crushed the past few weeks, but this setup on the 1-hour chart was too good to pass up. In my experience, when a bar forms that mirrors the previous bar but in the opposite direction - a reversal is likely. If you were to take the blue and the red bar and combine them on a 2-hr chart, you get nice long Pin candle. Actually, the 4-hour chart closed as a very nice Pin-Bar, but if I had waited for that candle to close before I entered my long position, I would have gotten a worse entry price. The stop-loss order on this trade was initially under the low of the blue candle, and I placed the take-profit order just bellow that swing low from yesterday. Trading counter to such a monster bear market is not advisable, but I moved my stop to break-even already, so at this point the trade is risk-free.
