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Tuesday, April 7, 2015

GBPUSD - Incorrect Read

GU has been in an overall downtrend for 10 months, but has become very choppy in the past month.

D shows the range boundaries.
240 is a mess but last week broke out of the down channel and is testing from above. The bar before my entry was a bull pin marking the end of L2. I stalked a test of that low.
60 shows the DTL stalled upward movement.
5 shows I missed the optimal buy after the downmove ended with a vol climax. Entry would've been taken just after 6:00pm.  A 2nd climax occurred at 8:30pm with an entry at 9:30pm.  I missed both entries and instead entered on a break of the small consolidation at 10pm.



No surprises how this ended.  I was stopped out after only seeing about 10 pips in favor when the resistance held i.e. the sellers returned.  The 60 shows a trap box just above the DTL that held. The 5 shows that same trap box and how my entry was right into the sell zone - big mistake. The 3rd vol circle shows they hit it hard as well. Not shown is GBPCAD which I watched at the time and saw it leading the way down.


1 loss for -0.5R. Fortunately, I took a reduced position knowing it wasn't a very good trade. Reflecting back I realize I should've skipped this buy seeing that I missed the 2 better entries earlier. The D had no momentum and was in a range, I entered at the top of the range and didn't exit when sellers hit it. Nor did I heed GBPCAD's warning. I could actually make a better case for a sell! Not because that worked, but because it was fresh off the TOP of the range and it agreed with GBPCAD's bearish view.

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