1.602 reached
left abit for 1.582, though meh... Anyway - it's a volatile pair. It has a hefty spread. It's not very exact(obviously, mainly noise from cable, but also from e/g, especially now at end of month - it's a legend bundesbank changes changes the UK european contribution at end of month - probably a legend, but ppl. believe in it, so it's kinda self fulfilling). With that volatility and spread, doesn't pay off to drop halfway, if you ask me.
Couple of days ago I was short 1.6375 - 1.623(was planning on 1.6205, but seeing it doesn't break 1.6215, closed, manually - was lucky to be on). Tried long 1.619, didn't get filled(again, lowest was at 1.6216 or so). Then tried 1.638 short, didn't get filled again - top was 1.635x. Tried 1.619 long, got filled, broke below. Waited for retest, dropped the long, opened the short for 1.602.
Ok, it's a matter of taste too - had sl at 1.597 when opened the long at 1.619. Even ignoring my lack of appetite for sl, in general it's pretty hard to have sl on gbp/cad, gbp/aud - with spread, with noise from cable, etc. Ok, seldom I get the sl hit, but naturally I want to win good pips when opening since... ugh, when sl really gets hit, well, it costs big time. When it closed below 1.619 on hourly, after - 1st hour bounce back little, 2nd hour lower low, 3rd hour close below - pic 2(and at close below I try to exit at be). Tried to close almost at be - was obviously it goes below, especially looking at cable which gave way to 1.644(closed at 1.6184 - to leave room for spread - well, turned out it was 1.6195 the top, but better safe) and open short @1.619(so, case I'm wrong again, to have a chance of closing almost at be) for 1.602.
But at least ~150-170 pips(to leave room for spread and such) for such a pair as target. And very conservative entries, even if you miss 80% of them if you want to close at be when it goes against you. Otherwise... 15 pips loss here, 10 there, it'll add up fast. And if you play with tight sl - you'll be hit alot due to noise.
Normally now would've try long at 1.6, but was already long on gbp/aud and short on cad/jpy - would've been too much correlation so left abit hoping for 1.58(kinda wasted money, but meh). Plus didn't exactly understood this afternoon and I don't like gbp one bit.
But - gbp is weak - that spike @1.635 on gbp/usd was when BoE minutes showed a change from 7:2 to 9:0 against interest rate increase and a hefty increase in jobless claims(pic 3). Yet the spike lasted for under 30 mins.(last time it was a switch in interest rate votes from 6:3 to 7:2, pound dropped more then 1%, for comparison). Next day turns out HP has to change 10bln USD in gbp(probably they didn't even change them all, but since everyone was expecting to...). Apparently what was needed to change, was changed, so now gbp/usd should go down below 1.62-1.625 and even more(makes me wonder why I'm long gbp/aud, but hey, 50% fibo is 50% fibo and 1.555 seems important on weekly so... keepin' it tight and hope for the best).
Bigger expectations on gbp crosses imho - otherwise with what you give on spread and on small losses, it'll be hard. And conservatives entries - wait for spike above what'd be the normal level so when you move at be the sl, you can be pretty protected. It'll miss many good entries, but those caught will be even better usually plus you'll be able to close at be case it goes against you.
See pic #4 - don't go short at 1.644 - go short at 1.647. You'll miss two move(yellow - tough luck, either stress, or less entries - 40% miss). But the bonus is brown - you go short at 1.647, you're wrong, yet you close at be on retest(anyway that was gung ho - was pissed since I missed the previous tp while correctly anticipating the news - shouldn't ever short again after such a small time inbetween and with it obviously wanting to go higher ignoring the bad news). If you went short 1.644, ugh, tough luck, tops you could've hope to close was 1.647 still losing 30+ pips. Plus, it's more relaxing - price hits, bounces in 30 mins, everything is nice and lacking stress. Plus, after it breaks below 1.644 you can set sl at be and you'll be partially protected by 1.644.
Naturally, when you buy afterwards, you buy at 1.644, not at 1.647.
Gbp/aud today is also a good example - you have daily low at 1.6164, you have 50 fibo 1.5574, you have weekly support ~1.555. Now, temptation would be to open at 1.557 so you don't miss the move. But at 1.557, gbp/usd was at 1.633. Now... nothing happens at 1.633 on cable, so waiting you can get gbp/aud @1.5555 when cable was closing to 1.625(a known support, not 1.633 which is... nowhere). Plus, when you move sl at be, you can hope to be protected by the 50% fibo at 1.557 which makes it easier to let the transaction run(that is again a matter of taste - I take 1st profit after I move sl to be, so sl being protected by something is even more important).
sorry for rambling, hope wasn't totally off(I know my explanations are awful...)
p.s - http://www.scribd.com/fullscreen/63007201 it's long and rather biased politically(or not, fact is it's correct on data). Was posted yesterday on ZH.