Thread: Discuss the GBP/USD with a DailyFX Analyst

Originally Posted by beeryboogy

I think I'm with you Bunton. It keeps bumping up against resistance and falling back... the daily trend is still down and it looks like the retrace of the move from 1.4978 to 1.3506 is about done. Purely technically, I am thinking down from here... I don't know how far though of course.

Edit: I'm out with 30 pips. Let's see if it comes back up to resistance again... then we'll enter short again.

Hi everyone,

First time post for me. remind to change me user name. as that is how I have been trading. 6 separate $100 deposits later, I managed to keep money in my account for a whole week! That info was offered to gauge how much credence to place in my post! 

What I did wrong: (I think)

Overleveraged even though I used the demo and read the forums on why money management is so important. I have a micro account and was using 10k lots.

I was only scalping due to the limited leverage.

My risk tolerance was out of whack. I set my stops to close, then moved them back, or stopped using them at all.

I never properly “Setup a trade.”

I would look only at large movements and try to get at least have the pips off that move.

I majored in Economics with a strong emphasis on money and banking. Thus, technicals meant nothing to me. Any thought going into a trade was purely based on fundamentals alone.

What I did right (I think).

While I still rely heavy on the fundamentals, I use the charts now too. But only as a support to my fundamental view.

There is no technical indicator that guarantees a profitable trade. In fact, I see so many others using so many indicators, I wonder if they are even looking at the big picture? I have to assume they are helpful, but they impede what the chart is telling me. After all, indicators only tell me what I already should know.

I majored in Economics with a strong emphasis on money and banking: So what. I wish I hadn’t to tell you the truth!

I have much larger stops now because I actually now do trade with an idea of where I think the market is going.

I have been practicing intraday to 3 day trades on the demo, and just began to implement similar trades into live trades. That is where the change comes. I can’t move my stops and limits if I am not watching! These longer term trades are either just saving time (balance in my accout) or I am learning something. I can only hope for the latter.

There are times you can see a big movement, and profit from it. An example was the USD/GBP.

Last night, ~ 1:00 AM EST, it moved up about 200 pips and I went long taking profits at about 15 -20 pip intervals. The volatility was crazy, so I setup my last trade, went to sleep, and found a 70 pip winner, still off that one GPD/USD long position.

I only trade USD crosses, as I am in the USA. At first, it was only EUR/USD exclusively. Currently, I have a trade that is waiting to fill with an entry order. If it doesn’t pan out, at least my account stay the same! Oh, and I only trade one pair at a time.

So to sum up, I stopped chasing price. I use the fundamentals to create trades, and only use technicals to confirm my fundamental bias. The indicators are taken off my charts once a trade is filled. For now this change is working. Of course I could use all the help I can get, and good luck to all and may all your trades be informative and profitable. oops. My order just filled, I reevaluated the chart, and didn’t like the trade anymore. I got out with a 3 pip loss. Let’s see if that was dumb. My guess is – it was dumb. So much for my post LOL!

Comments are welcome and I take criticism very well.

Mike

Originally Posted by swifty

Hi everyone,

First time post for me. remind to change me user name. as that is how I have been trading. 6 separate $100 deposits later, I managed to keep money in my account for a whole week! That info was offered to gauge how much credence to place in my post! 

What I did wrong: (I think)

Overleveraged even though I used the demo and read the forums on why money management is so important. I have a micro account and was using 10k lots.

I was only scalping due to the limited leverage.

My risk tolerance was out of whack. I set my stops to close, then moved them back, or stopped using them at all.

I never properly “Setup a trade.”

I would look only at large movements and try to get at least have the pips off that move.

I majored in Economics with a strong emphasis on money and banking. Thus, technicals meant nothing to me. Any thought going into a trade was purely based on fundamentals alone.

What I did right (I think).

While I still rely heavy on the fundamentals, I use the charts now too. But only as a support to my fundamental view.

There is no technical indicator that guarantees a profitable trade. In fact, I see so many others using so many indicators, I wonder if they are even looking at the big picture? I have to assume they are helpful, but they impede what the chart is telling me. After all, indicators only tell me what I already should know.

I majored in Economics with a strong emphasis on money and banking: So what. I wish I hadn’t to tell you the truth!

I have much larger stops now because I actually now do trade with an idea of where I think the market is going.

I have been practicing intraday to 3 day trades on the demo, and just began to implement similar trades into live trades. That is where the change comes. I can’t move my stops and limits if I am not watching! These longer term trades are either just saving time (balance in my accout) or I am learning something. I can only hope for the latter.

There are times you can see a big movement, and profit from it. An example was the USD/GBP.

Last night, ~ 1:00 AM EST, it moved up about 200 pips and I went long taking profits at about 15 -20 pip intervals. The volatility was crazy, so I setup my last trade, went to sleep, and found a 70 pip winner, still off that one GPD/USD long position.

I only trade USD crosses, as I am in the USA. At first, it was only EUR/USD exclusively. Currently, I have a trade that is waiting to fill with an entry order. If it doesn’t pan out, at least my account stay the same! Oh, and I only trade one pair at a time.

So to sum up, I stopped chasing price. I use the fundamentals to create trades, and only use technicals to confirm my fundamental bias. The indicators are taken off my charts once a trade is filled. For now this change is working. Of course I could use all the help I can get, and good luck to all and may all your trades be informative and profitable. oops. My order just filled, I reevaluated the chart, and didn’t like the trade anymore. I got out with a 3 pip loss. Let’s see if that was dumb. My guess is – it was dumb. So much for my post LOL!

Comments are welcome and I take criticism very well.

Mike

Hi Mike -- welcome. Join the club -- I have an MBA and I still lost about $70K in the first 3 years I tried trading. :-) But ... I did learn a lot and at this moment, I have turned my little $75 FXCM Micro account into $210! yay. Maybe there's hope for us yet. You'll get it eventually... it takes a lot of personal discipline and patience to wait for the right conditions to enter a trade. Trial and error (and a lot of those!) seems to be working finally for me.

Originally Posted by swifty

So to sum up, I stopped chasing price. I use the fundamentals to create trades, and only use technicals to confirm my fundamental bias. The indicators are taken off my charts once a trade is filled. For now this change is working. Of course I could use all the help I can get, and good luck to all and may all your trades be informative and profitable. oops. My order just filled, I reevaluated the chart, and didn’t like the trade anymore. I got out with a 3 pip loss. Let’s see if that was dumb. My guess is – it was dumb. So much for my post LOL!

Comments are welcome and I take criticism very well.

Mike

Hi Mike,

This kind of analysis of your own trading is really great. Too often I think traders continue to make the same mistakes without taking proper stock of where they've gone wrong, and really, highlighting personal strengths and weaknesses is what it's all about.

For instance, I have a really difficult time trading intraday because my emotions get the better of me and I end up going against my own money management rules. Thus I concentrate on more medium-term trades that I don't watch on a regular basis. Otherwise, I stick to my own forte: automated system trading.

At the end of the day, trading shouldn't be that difficult, but it is. Speaking from personal experience, it is easy to make proper analysis when you are emotionally removed from the process. Once you hit that "buy" or "sell" button, though, it makes a big difference and more often than not, analysis becomes much more subjective.

Thus for me I try to stick to a routine as best I can and use system trading whenever possible. Obviously there are a ton of people who are able to handle the big emotional swings, but I recognize my own weaknesses and it has translated into better trading.

Check out the articles I've posted so far on proper trading strategies:

Why Does the Average Forex Trading Strategy Lose Money?

How Do we Know What Stop Losses to Use in Trading? An RSI Case Study

Originally Posted by David Rodriguez

Hi Mike,

This kind of analysis of your own trading is really great. Too often I think traders continue to make the same mistakes without taking proper stock of where they've gone wrong, and really, highlighting personal strengths and weaknesses is what it's all about.

For instance, I have a really difficult time trading intraday because my emotions get the better of me and I end up going against my own money management rules. Thus I concentrate on more medium-term trades that I don't watch on a regular basis. Otherwise, I stick to my own forte: automated system trading.

At the end of the day, trading shouldn't be that difficult, but it is. Speaking from personal experience, it is easy to make proper analysis when you are emotionally removed from the process. Once you hit that "buy" or "sell" button, though, it makes a big difference and more often than not, analysis becomes much more subjective.

Thus for me I try to stick to a routine as best I can and use system trading whenever possible. Obviously there are a ton of people who are able to handle the big emotional swings, but I recognize my own weaknesses and it has translated into better trading.

Check out the articles I've posted so far on proper trading strategies:

Why Does the Average Forex Trading Strategy Lose Money?

How Do we Know What Stop Losses to Use in Trading? An RSI Case Study

Mike, very interesting points. I would say many jump from system to system and never give the time needed for any one system. I also like trading the longer time frames and once the trade is turned on we manage risk through our stops. My best trades are the ones I set up and leave the screen and only check back from time to time. The longer I watch the price action of a trade I'm in the more likely I'll exit prematurely.

So since we never know for sure what is going to happen once in we exit from the stops. I have found in my trading journey that the less decisions I make while in a trade the better. Since one now has a plan for a trade you try to stick with it. Often this means having a stop that is larger then 20 pips.

Originally Posted by David Rodriguez

Hi Mike,

This kind of analysis of your own trading is really great. Too often I think traders continue to make the same mistakes without taking proper stock of where they've gone wrong, and really, highlighting personal strengths and weaknesses is what it's all about.

For instance, I have a really difficult time trading intraday because my emotions get the better of me and I end up going against my own money management rules. Thus I concentrate on more medium-term trades that I don't watch on a regular basis. Otherwise, I stick to my own forte: automated system trading.

At the end of the day, trading shouldn't be that difficult, but it is. Speaking from personal experience, it is easy to make proper analysis when you are emotionally removed from the process. Once you hit that "buy" or "sell" button, though, it makes a big difference and more often than not, analysis becomes much more subjective.

Thus for me I try to stick to a routine as best I can and use system trading whenever possible. Obviously there are a ton of people who are able to handle the big emotional swings, but I recognize my own weaknesses and it has translated into better trading.

Check out the articles I've posted so far on proper trading strategies:

Why Does the Average Forex Trading Strategy Lose Money?

How Do we Know What Stop Losses to Use in Trading? An RSI Case Study

That's exactly right, David. I do the same exact thing... get too emotionally involved in a trade when it's short-term. I'm finding day/swing trading to be more comfortable for me. That means taking bigger risks by having larger stops, but I don't have to sit and watch every tick of the day either. I'd rather be poorer with no ulcers, thank you. :-)

Bryan

Originally Posted by beeryboogy

That's exactly right, David. I do the same exact thing... get too emotionally involved in a trade when it's short-term. I'm finding day/swing trading to be more comfortable for me. That means taking bigger risks by having larger stops, but I don't have to sit and watch every tick of the day either. I'd rather be poorer with no ulcers, thank you. :-)

Bryan

beeryboogy, if trading the higher time frames you need to become aware of position sizing. Don't try to make a fortune and if just starting out I would highly recommend trading very small positions maybe even mini or micro lots. The money will come later as it does take a DR time to learn his skill your trading endeavor is no different. It took me over 4 years to almost get it right. Even now I take my losses like the next guy. If emotions are getting the best of you just set your trade up and control it from your stops or profit areas. Turn off the screen and let it be because micro managing is a very frustrating mechanism that eats trading accounts.

Originally Posted by Ammy

GBP has weak fundamentals as UK debt, worsening economic data and forth coming rate cut next week all demonstrate this make the pair unattractive for risk averse traders in the short term.

GBP/USD hit 1.4469 resistance today (max resistance of 1.5372), with EUR/GBP 100% projection of 0.9799 to 0.8838 on the table.

The BOE decision next week (with fairly moderate economic data in the pipeline until then) might make some difference to the current positive outlook.

However, this should not be taken for granted, as recently BOE decisions have actually led to a rise in GBP/USD.

I'm emotionally tempted to rush out and swap currencies atm. However, patience has led to some considerable gains this week.

Quite right trigger but beyond this rally and With Sterling doing the proverbial yoyo since October, priced on fundamentals the likely swich in sentiment will see a continuation of the longer trend and speculation will ensure the typical reversals we have seen of late not a time to be long the pound.

Originally Posted by Bunton

beeryboogy, if trading the higher time frames you need to become aware of position sizing. Don't try to make a fortune and if just starting out I would highly recommend trading very small positions maybe even mini or micro lots. The money will come later as it does take a DR time to learn his skill your trading endeavor is no different. It took me over 4 years to almost get it right. Even now I take my losses like the next guy. If emotions are getting the best of you just set your trade up and control it from your stops or profit areas. Turn off the screen and let it be because micro managing is a very frustrating mechanism that eats trading accounts.

You're exactly right. Except when I get frustrated and emotional, I've vowed to have no more than 4 lots in play at a time with tight stops. When I get frustrated, all planning goes out the window and I put in 10-15 lot positions like I did today and came out with a small gain. It's too bad it works sometimes, otherwise I wouldn't do that. ;-)

Bryan

Originally Posted by beeryboogy

You're exactly right. Except when I get frustrated and emotional, I've vowed to have no more than 4 lots in play at a time with tight stops. When I get frustrated, all planning goes out the window and I put in 10-15 lot positions like I did today and came out with a small gain. It's too bad it works sometimes, otherwise I wouldn't do that. ;-)

Bryan

Hi Bryan,

You simply have to become disciplined, as trading position sizes over 3 times greater than you originally planned shows a complete lack of control.

As an intelligent guy, you do have the ability to succeed in forex, but what you describe is dangerous, irrespective over whether you are trading on micro, mini or standard accounts.

Also, you describe taking your account from $75 to over $200, presumably in a very short space of time(?), which shows the excess leverage you are playing with relative to your capital base. You must treat your account with the greatest respect, no matter what the size. Learn discipline, patience, respect for your capital and solid money management, so that they are all firmly ingrained into your psyche. Only then do you deserve the right to scale up your risk.

You have to either master this discipline, change your trading style to longer-term positions and cut out scalping, or give up trading altogether.

I speak from someone who endured significant losses at the start of my journey in trading through continually making the same mistakes that you describe.

Wishing you every success, friend.

Paul

Originally Posted by khanay

HedgeHog and to the other experts here..

I am kinda stuck at long GBP/USD at 142.48
and a trade Short at GBP/USD at 141.67

I hedged it not sure why lol. I want to get out from one of the trade and let the other run to cover some profit. What do you guys think? will the pair go down further or move up towards 1.43 again. Right now its at 141.91?

Khanay, If you are not sure why you did something.. You need to stop. Get all your emotions out of it and asses the situation. Many brokers may promote that trading is easy but, in reality, it is not! If you close out both positions right now you are only out 81 pips.. Don't know what your leverage is but, If you leveraged anything higher than the lowest availble.. You just compounded your problem. If you don't have a strategy that uses hedging.. Don't do it! Just becaue it is available doesn't mean you have to use it. If you have never traded before. I would advise you not to place anymore trades and take the FXCM Power course. Forex Trading Education | Learn forex trading online | Forex course It is only about $20 US. If you don't have time for education; then you don't have time to trade. If you would have taken this course before you placed these two trades, It probably could have saved you the 81 pips. If you are just placing trades becaue you "think" the market it going to go higher / lower. That is just another reason to take some training courses. I don't mean to sound harsh but, I'm just trying to save you some $$ and a little bit of emotional pain. I hope you suceed after you take some training courses.

Dj

Originally Posted by se1paul

Hi Bryan,

You simply have to become disciplined, as trading position sizes over 3 times greater than you originally planned shows a complete lack of control.

As an intelligent guy, you do have the ability to succeed in forex, but what you describe is dangerous, irrespective over whether you are trading on micro, mini or standard accounts.

Also, you describe taking your account from $75 to over $200, presumably in a very short space of time(?), which shows the excess leverage you are playing with relative to your capital base. You must treat your account with the greatest respect, no matter what the size. Learn discipline, patience, respect for your capital and solid money management, so that they are all firmly ingrained into your psyche. Only then do you deserve the right to scale up your risk.

You have to either master this discipline, change your trading style to longer-term positions and cut out scalping, or give up trading altogether.

I speak from someone who endured significant losses at the start of my journey in trading through continually making the same mistakes that you describe.

Wishing you every success, friend.

Paul

Oh yes, you are correct. And I have endured large losses already - dwindling away an inheritance from my mom down to $0. I must be learning the hard way.

However... somehow I have come to believe that just about everyone needs to go through this pain cycle that I'm getting to the end of. The gambling fever and get-rich-quick mentality have to be thoroughly squashed before a trader gets serious about the business of trading... either that, or they drop out of the race completely as you say. I am certainly determined to learn to control myself and manage my capital -- I'm just at an earlier stage than you are, and that's OK. I'll get there eventually. This is a reason I have only a micro account and have only $75 of my own money at risk. So in this learning process, I am willing to lose all that I have put into it, and if I do lose it all, I will put another $25 in and start over with new experience under my belt. Trading is actually fun with relatively little at risk right now, and I'm learning a lot.

So, allow me to make stupid mistakes with my 10 lot gambles... I'll lose it all at some point, learn something new, and try again. As long as I'm learning something, I don't mind paying the tuition. :-)

But I do appreciate your help and advice, and I have already learned a lot here in this forum in the short couple months I've been trying Forex trading. It's actually a lot of fun and good, cheap entertainment (if I keep my capital investment low). Keep the good advice coming... and you may be talking to the next George Soros. lol

Thanks!
Bryan

Originally Posted by beeryboogy

Oh yes, you are correct. And I have endured large losses already - dwindling away an inheritance from my mom down to $0. I must be learning the hard way.

However... somehow I have come to believe that just about everyone needs to go through this pain cycle that I'm getting to the end of. The gambling fever and get-rich-quick mentality have to be thoroughly squashed before a trader gets serious about the business of trading... either that, or they drop out of the race completely as you say. I am certainly determined to learn to control myself and manage my capital -- I'm just at an earlier stage than you are, and that's OK. I'll get there eventually. This is a reason I have only a micro account and have only $75 of my own money at risk. So in this learning process, I am willing to lose all that I have put into it, and if I do lose it all, I will put another $25 in and start over with new experience under my belt. Trading is actually fun with relatively little at risk right now, and I'm learning a lot.

So, allow me to make stupid mistakes with my 10 lot gambles... I'll lose it all at some point, learn something new, and try again. As long as I'm learning something, I don't mind paying the tuition. :-)

But I do appreciate your help and advice, and I have already learned a lot here in this forum in the short couple months I've been trying Forex trading. It's actually a lot of fun and good, cheap entertainment (if I keep my capital investment low). Keep the good advice coming... and you may be talking to the next George Soros. lol

Thanks!
Bryan

Hello Bryan,

I was not having a pop at you in any way.

By all means carry on enjoying the entertainment and thrill of trading micro lots, whilst learning about the markets in the process. There is nothing wrong with that being your motivation for dabbling in forex.

However, from reading your posts, I get the sense of someone with a real desire to make forex a proper business, rather than just a hobby. Your posts show a hunger to absorb knowledge from others, which is excellent. If these assumptions of mine are true, then you need to treat this micro-account in the same way you'd treat a standard account or client's money; prove to yourself that you can master money management and trading discipline - otherwise you will never be able to scale up your trading. Journal all your trades and the rationale behind them, then review at the start of the next trading day with a fresh pair of eyes, looking at the results in the same way an investor would review the performance of their asset manager.

I am not speaking as someone who's climbed the mountain. I am constantly learning from others and am still prone to making stupid mistakes.

As for Mr Soros, he is a hero of mine. Although he is getting old, so it could be time for someone to succeed him! ;-)

Originally Posted by se1paul

Hello Bryan,

I was not having a pop at you in any way.

By all means carry on enjoying the entertainment and thrill of trading micro lots, whilst learning about the markets in the process. There is nothing wrong with that being your motivation for dabbling in forex.

However, from reading your posts, I get the sense of someone with a real desire to make forex a proper business, rather than just a hobby. Your posts show a hunger to absorb knowledge from others, which is excellent. If these assumptions of mine are true, then you need to treat this micro-account in the same way you'd treat a standard account or client's money; prove to yourself that you can master money management and trading discipline - otherwise you will never be able to scale up your trading. Journal all your trades and the rationale behind them, then review at the start of the next trading day with a fresh pair of eyes, looking at the results in the same way an investor would review the performance of their asset manager.

I am not speaking as someone who's climbed the mountain. I am constantly learning from others and am still prone to making stupid mistakes.

As for Mr Soros, he is a hero of mine. Although he is getting old, so it could be time for someone to succeed him! ;-)

Ha -- stupid mistakes is how God keeps me humble. I do have a hunger to learn, in all things not just trading. I'm 47, so I have to hurry because there's not much time left before my brain gets old and moldy. :-) My main purpose in life is not to make money though, but if that's a byproduct of wisdom, all the better. Cheers, my friend.

Bryan

gbpusd 1.4538 now
I expect upmove is near top.
Reversal to down is expecting in area from here at 1.4538
to 1.6 but it is more likely it will be near (below) 1.5. after such upmove some consolidation
activities are expecting.
We are longtermly on down trend again (this upmove was only part of downtrend).
Target 1.33
So SELL at first sign of reversal.
Downtrend will be confirm with the test of 1.4 level
So be carefull on this level to possible SELL entry
So
SELL (at 1.4)
Stop loss 1.5 (after test 1.4)
Target 1.33 target profit of 700 pips

p.s. I will be here time to time to explain levels and moves regard
this forecast. This is midterm forecast.