26/02/2010

26 FebruaryGBP March 10 Contract:



Following on from the same method of marking off the overnight range and then waiting for a break out. I took a little snap shot of a GBP chart pre GDP figure and I have marked it's trading range. The figure caused a little spike but price quickly retraced back into its range so I'm still looking for the breakout and for price to start moving (in what ever direction that may be) The green circles mark off the swing points of yesterdays move before the range.The red circles show the last swing high and low before the range. The pink lines mark of yesterdays trading range and the same set up. As you can see the breakout got me short and was a fairly nice trade.


11:20


Nothing really exciting happening with this GBP trade. Price is slowly ticking down to the base of the range which I have marked of at 1.5187. Sooo if it gets there then we are looking to trade the breakout however it also presents the opportunity for a naughty range scalp. If price tests that level and bounces then ill be looking to buy and hopefully ride it up to the top of the range. I have several ways determining if price has bounced or not and I'll post the setup if we Ever get there. The same theory can also be applied to shorting at the top of the range. While targets arn't large in this trade plan there is the potential to grab several bites of the cherry and can turn a slow day into a profitable one.


13:03


GBP breaks out of the range however I didn't take the trade. There where a few reasons why, firstly it was right on the border of having done 65-70% of its average day move (A theory which is not mine but a good one none the less and I think there are a few posts on here about it) But ultimately the reason was being a little to close to the GDP figure. As I said earlier I'm not usually too bothered about news announcements and figures however major figures such as GDP, NFP and interest rate decisions are enough to keep me out of the market, mainly just to avoid being stopped out by a spike. If I'm already in a trade there is not much I can do but I didn't want to take a position this close to the number This time it worked out in my favor as the trade would of been stopped out had I taken it however it could of just as easily come off and been profitable.


so had I taken the trade in the usual way. Red circle marks the breakout low, -2 round down to give an entry of 1.5180 (red line) stop goes above the pullback high +2 round up (blueline) at 95 and as you can see I would of just come about 2 ticks shy of the scale but would of been stopped out.On a side note these arn't the only trade setups I'm taking just the only ones im posting at the moment, didn't want you to think I sat here all day doing nothing.