A GBPUSD Short Trade That Made 3000 Pips In 15 Days

When you swing trade on the daily chart, you have ample of time to plan your trade. The most important thing on the daily chart is to correctly identify the start of a trend and the end of the trend. For trends start abruptly and end suddenly. If you are not alert you can lose all your gains. In this post we are going to analyze a swing trade in which GBPUSD fell around 900 pips followed by a cataclysmic week in which GBPUSD shot up 600 pips in just a matter of few hours after the FOMC Meeting Minutes release. Take a look at the following daily chart!

GBPUSD Swing Trade

The 2 red arrows on the chart show the start of the trend and the end of the trend. Below is the screenshot of H4 timeframe that shows the start of the trend!

GBPUSD Swing Trade

The 2 red arrows show the start of the trend and GBPUSD falling massively. But there is no strong signal. There is no bearish divergence signal either on the daily or the 4 hourly charts that can alert us to the start of a big move. But when we look at the hourly chart, we do find a bearish divergence.

GBPUSD Swing Trade

You can see the bearish divergence marked on the chart. So we take the risk and make an entry at 1.55354 and the stop loss is 1.55554. The risk is only 20 pips in this case. Now most of the time we are not sure how big the move is. That’s why we enter the market with low risk and only enter again when we find a new signal in the direction of the trend. This is precisely what we do. We enter the market with a risk of 20 pips. After that we close the computer and when we check again the next day, GBPUSD has fallen around 150 pips in 1 day. MACD has also changed color so we know now that GBPUSD has started a downtrend.

Next day GBPUSD rises around 60 pips and then starts falling again. We find our bearish divergence on H1 and enter a new position at 1.54389 while we move the stop loss to breakeven 1.55354 for the first position. Our first position is risk free now. The second position has a cushion of 100 pips.

This is how we trade. Daily we check the H4 and D1 chart and if we find a good entry we enter a new position while moving the stop loss to breakeven for the previous position. We open a new position at 1.53605 and move the stop loss to 1.54389. Now the first 2 positions are risk free. This is how we trade. If you are member of our Million Dollar Trading Challenge, we email you when we think we have go a good trade. Then we email you when we open a new position and move the stop loss. You can try our Forex Signals for 15 days for $1 only.

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