GBPUSD Sell Trade With SL15 Pips And TP 200 Pips

GBPUSD is a great pair when it comes to making pips. Did you read the latest issue of FX Trader Magazine? When you are trading GBPUSD always keep this in mind, it can change direction all of a sudden. This pair reads the news just like us and can change it’s mind in just a second. So be careful. This is exactly what happened on Tuesday when British Prime Minster Theresa May announced that she will be signing the Brexit Article 50 on Tuesday. GBPUSD had been rising when it suddenly changed direction and fell 200 pips. Take a look at the following screenshot.

GBPUSD Sell Trade

If you have been reading my blog posts, I firmly believe in the power of candlestick patterns in predicting the market. Now you never know how much the market is going to move. You can never predict that. But you can follow the momentum and stay in the trade as long as the momentum persists in the market. I measure the momentum in the market with MACD ( Moving Average Convergence Divergence). This is a great momentum indicator. When the momentum shifts in the downward direction I stay in the trade as long as the momentum keeps on increasing in the downward direction. Read this post on EURUSD sell trade with 15 pip SL and 150 pip TP.

Do you see the red arrow in the above screenshot? This is the entry candle on M30. Just make sure that you enter with a small risk. I have fixed my risk to 15 pips now. I don’t open a trade with a risk of more than 15 pips. This is something that I have written in stone in my book of risk management. I used to open trades with risk of 50 pips. But then I realized I can easily open a trade with 25 pips. After a few months, I realized it is very much possible to open a trade with a risk of 15 pips and catch a big move in the market. So this is what I do. I only risk 10-15 pips per trade. If I am wrong I pay a small price. But if I am right I make 100-200 pips which is good for my account. Pivot points are used by professional traders in their daily trading. Read this post on 5 different pivot point formulas that are used by traders. Pivot points are leading indicators. You just need the daily candle of the last day to calculate today’s pivot point levels. Fibonacci levels are another leading indicator that most traders believe and use a lot in their trading.Most traders love to combine fibonacci with pivot points. Download this Fibonacci Pivot Point Indicator FREE.

Now as said above, we cannot predict how much the price is going to move. I tired to predict that and wasted a lot of my time. I learned machine learning and artificial intelligence and tried to build all sorts of predictive models that will predict the price. After wasting many months, I realized we cannot predict price. But we can use candlestick patterns and try to predict whether it will be a big move or not. Once we enter into a trade we stay in the trade as long as we have the momentum on our side. I use MACD for measuring the momentum as I have said above. Did you read the post on how to trade FOMC Meeting Minutes every month?

The game of forex trading is simple. We try to catch the big moves in the market with a small risk of 10-15 pips. If we succeed 60% of the time, it means we will be winning 6 trades out of 10 trades on average. Losing 4 trades we lose 60 pips if our stop loss is 15 pips on average, Suppose we only make 100 pips per winning trade. Then we make 600 pips and our net profit is 540 pips. And if we make 200 pips per trade then we make 1200 pips and our net profit is 1140 pips. So keep the risk small and try to catch the big moves in the market. Big moves only happen when there is some breaking news. This time it was the signing of Brexit Article 50 which means the start of proceedings for Brexit. Did you read the post on how to trade correlated pairs like GBPJPY and GBPNZD? All GBP pairs are correlated. So when GBPUSD starts to fall, you will find GBPNZD, GBPJPY, GBPCAD, GBPAUD etc all other GBP pairs also falling.

Did you take a look at my course Bayesian Statistics for Traders? Bayesian Statistics is ideally suited for us traders. Unlike the frequentist statistics where the probability is fixed, in Bayesian Statistics we express our belief with a probability estimate. This is our starting point known as the prior. After that we let the data modify our prior belief. Data can say that the chances of prior are small in which we lower our belief probability. This is known as the posterior probability. I have made everything simple for you to understand in this course on Bayesian Statistics for Traders. I take you step by step and teach you how you are going to apply Bayesian Statistics to know what is happening to the market.

Looking at GBPUSD daily chart, I think GBPUSD will fall 200-300 pips more before it finds support around 1.21000 price level. Were you there when British Pound suffered a flash crash last year? Read this post which explains what caused GBPUSD Flash Crash/ In the middle of last year GBPUSD suddenly fell more than 1400 pips in just 2 minutes one night and then recovered. What was that? Many traders got their accounts blown when this happened. Were you amongst them? Luckily I had no open trade that day. So I didn’t feel any pain. But the writing was there on the wall. Daily candle and the weekly candle were both bearish. This was a strong signal that market is in a strong down trend. So when you trade always first take a look at the weekly and daily chart and always trade in the direction of the higher timeframe.