Hello folks!
On yesterday’s post I was commenting that it seems like the AUD is getting stronger against the GBP and against the EUR and I was ready to take short entries on either GBPAUD or EURUAD. Well, today I got my entry signal on GBPAUD right as the London session opened up: I was looking to trade a continuation move to the downside upon a breakout-pullback-continuation pattern clearly identifiable in the 4H chart throughout last night’s Tokyo session. Early in the morning the GBPAUD ticked a new low and there’s where I jumped short into this trade.
It’s been a beautiful move down all day long and as I type these lines I am sitting at +203 pips in profit. I am not ready yet to move stop to breakeven or to cash out a portion of my position so I as of right now I am still exposed to this trade. I would not be surprised to see a little bit of a retracement now that we’ve had three consecutive bearish days (profit takings they call it), but I will hold to my guns at least until Thursday when the Bank of England will release the Interest Rates announcement - analysts expect a 0.25% rate cut and I certainly hope they deliver!
Feel free to comment on this trade or on the GBP outlook (*cough* bearish *cough*) here on this post :)
Here below you may watch the video.
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8 April, 10:11 pm
I think this must be one of the best trades i have taken since following your blog hector.
I *mistakenly* took a short entry at 2.1575 because as usual i didn’t wait enough for the pullback, it was a risk I took, but I am +420 in profit as I type these words. I slap myself on the head because it was only 1lot (1$ per trade) that I took. I am SUCH an ass sometimes.
Anyhow, it will serve me as practice.
What I would like to ask Hector is: See the clear uptrend on the EURJPY on the 4hr timeframe? There seems to be a strong resistance line at 161.32 coming all the way back from the 26th February. Would you still consider this valid if it breaks above the 161.32 line (with a breakout,pullback,continuation pattern)? Or since there is so much overhead resistance, you would fear it could quickly catch the downhill?
Thank you for your committment to this blog mate! Well done on the trade I may add :P
8 April, 11:25 pm
Holy molly, +420 pips?!? you certainly got in VERY early Daniel, wow! Don’t worry about trading $1 per pip or $150 pip pir, what’s important is that you do follow a sensible money management approach and eventually your account WILL grow, trust me.
Regarding EURJPY 4H, I am not very keen on this setup because the swinging formation is not that pretty to be honest, plus there’s resistance all the way to 162.00. I think there are far better looking setups out there at the moment. Have a look at GBPJPY Daily…
Cheers,
-HECTOR-
8 April, 11:57 pm
It’s interesting that this (GBPAUD) setup came with such positive confluences on the daily/4hr chart and yet there was no ‘red circle’ to draw attention to it.
I missed this opportunity because I typically scan
the dashboard for trending charts (red/green) and only focus on those timeframes.
Maybe I need to adjust my scanning routine to look at all charts (just in case)?
9 April, 12:27 am
Love following your blog Hector, especially when you have great trades like today. Unfortunately my broker doesn’t offer GBP/AUD! Maybe it’s time to find a new one.
9 April, 12:53 am
Hector,
I followed the trade and made the same decisions as you pretty much apart from the final entry.
We saw the triangle go into a channel, we then got the break, however I was unclear about the pullback as it didn’t seem to retest another level that I could define.
So I guess my question is when is a pullback a good pullback ? Obviously this definition may change depending on the time frame we are trading. i.e. lower/smaller time frames probably on the level, larger time frames near the level (more flexible) ?
Nic
9 April, 10:29 am
Hello Nic, I will be honest with you: as soon as price began pulling back on the 4H chart after the breakout of the sideways channel, I placed my sell stop order as usual right below the breakout thrust. You know, what I typically do. HOWEVER, I expected the pullback to go a little bit higher up to retest the channel from below - that eventually never happened and as London market opened up price dropped like a rock in momentum and triggered my sell stop. I was taken by surprise actually and sort of concerned me since it’s not a perfect BPC pattern, but I guess GBPAUD suffered from so much selling presure that it couldnt even retest the channel from below before going through the continuation part of the BPC pattern.
You know what I always say: trading is not perfect and price patterns hardly ever are text-book clear.
Paris - I had been following GBPAUD (and GBPJPY) for a LONG time, weeks even, so it was hard for me to miss the breakout :p
Back to my charts now!
Cheers,
-HECTOR-
9 April, 10:57 am
Hector,
Sure, appreciate that its never exact.
So, would a reasonable candle pullback on the trigger chart be a good signal that things are looking good for a BPC pattern ?
Nic
9 April, 3:36 pm
Hi again Nic,
Well, it’s always nice to see a perfect BPC pattern and each setup must be analyzed independently of course, but in this case everything was screaming “bearish” so I went ahead a placed my sell stop order right away. I guess it’s something that becomes more intuitive as you gain experience as a trader.
-HECTOR-
9 April, 8:00 pm
if confused sometimes i find things much clearer using just a chart with the price as the line of closes. on say the 1hr chart there was a clear signal for a continuation trade around the 21400 with stop 21500.
Sometimes the conflicting red green colours of the candle bars tricks the eye and mind into thinking something is more complex than it is? so i always have a line chart of closes as backup.
keep up the good work.
9 April, 9:40 pm
dear hector:
i have followed the GBP/CHF for several days,it have finally broken blow the up trend line(1.9850) on the dailychart.the pullbcak meet the resisitant at 1.9800(never touched the trendline again),then it continue to fall to 1.9724.i don’t claarly understand how to define the pullback–continuation pattern,the difficult is that sometimes we don’t have enough time to keep our eyes on the chart, do you suggest to use the buylimit or selllimit order to solve the problem?and this is also not perfect,as the price may never pullback to the resisistant level that we set the order.
10 April, 10:07 am
Good morning guys.
Richard - I totally agree with you: the less you cluster your charts the better. I never quite understood the need to load up a bunch of different indicators: a trend and levels of support/resistance is all you need in my opinion. Every trader needs to find whatever works for him in an easy-to-read manner.
David - I think long term charts are easy to keep track of if you’re short on screen time: a wise combination of sound alarms and stop/limit orders will work wonders for you trust me. I would recommend you to experiment with those tools off the longer time frames and you will see how you can keep up with your trading. And yes something the BPC might not be mint-clear but that’s where your experience as a trader and chart-reader comes into the picture :)
Cheers,
-HECTOR-
10 April, 10:23 am
Aha! - i missed the LOB on the 1HR for the GBP/AUD, as we didn’t get the restest it was the effective continuation pattern (i will check for this in future)…..but don’t worry i didn’t miss it on the USD/CHF…ha ha
10 April, 11:33 am
Hehehe well done :)