Fan Yang
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Managing the GBP/USD trade after hitting first target

The short trade in GBP/USD has worked out at least for 1 of the 2 positions opened from 1.3425. I talked about the trade earlier in the week: GBP/USD shows respect to the 1.35 resistance; following a bearish trade

GBP/USD 1H Chart 7/20

(click to enlarge)

1st target hit:
During the 7/19 session, GBP/USD continued to slide and hit the 1.3120 target.
- I actually moved the limit to 1.31 when I saw price accelerating downwards. 
- Price fell even further below 1.31 before finding support at around 1.3065.  

- The 1H chart shows that GBP/USD rallied after a bullish divergence with the 1H RSI. 
- The pullback is so far holding under 1.32. 
- I think if GBP/USD is still bearish, price should indeed pivot downwards here. The 1H RSI should also hold under 60 for the most part. 
- If price does push higher, 1.3250 is my last line of defense for the bears. I think above 1.3250, GBP/USD would have neutralized the mode, and I would have to scrap the bearish outlook.

Moving down the stop; locking in profit:
- The 1.31 target gave me about 325 pips. 
- If I move my stop for the open position to 1.3325 (right above the 7/18 high), then I would stop out with a 100 pip gain. 
- The minimum gain would therefore be 425 pips.
- The maximum gain if GBP/USD falls to 1.30 would be 325+425 = 750 pips.