Cable Update (GBPUSD)

What's with the crazy price action and spread? I went to get some tea at Starbucks, looked at the price, noticed the the pip spread was out of whack, and the price was around 1.65. Got my tea, looked again, and within a few minutes we had gone up to 1.6520 area and right back down again.

Fluke?

hope you are not right this time
cause, were going down sir.

that was weird similar on eurgbp> if this pair continues up, then looking promising to hit the 1.641xx area on GU sooner than expected.

Yeah WTF with this spike? Year end profit taking methinks.

It wasn't just the spike that got me, it was the pip spread as well. I tend to trade commission, which means my spread is generally 1 pip or less. At that time it was a 4 to 5 pip spread.

Where is your target?

Charts?

Much talk... BUT no charts...

Meanwhile on the DOW...

Overall profit

ty pip that is really good to hear some1 is!!
i like ur posts also btw good detail and safe play

My first month of forex I lost half my account. I won't even bother to give anyone a heart attack by saying how much that is.

I kept trying the different techniques and systems that people have posted here and kept losing my ass time and time again.

The last two months has been much better for me. I'm making money finally (Although I haven't made back nearly what I've lost) and have a more consistent trading strategy. We'll see if I'm still around this time next year or if I've given all my trading money to you lot.

My advice would be to find the system you like and hone your skills on it, don't jump around too much. All the best for a successful 2014.

I guess the difference between us is how I work my own strategy. I waited until I got home from work to share this idea though. I'm sure it's not an original idea, but I haven't read it elsewhere. Therefore, if it has a name and an inventor, I apologize in advance for not giving them credit.

In this current upward move, I have purchased 3 different times for a total of 5 lot's up. My averaged in cost basis is around 1.6430. I say that because as it trades around 1.6490 I find my account at $300.00 profit. I am currently making $5.00 a pip, so it stands to reason I will break even at 1.6430.

Ok, so, we have established that right now I am $300.00 in profit. Like PipTrapper, I expect a correction. Mostly because the daily looks ripe for a correction. To plan for this correction I have several options. I can simply sell my purchased lot's at take the profit off the table, probably the most common option, and then get ready to buy again during the correction. I can sell some of my lot's and take a partial profit, in case it doesn't go down, I can hold and just let it ride until it heads back up again, or I can take option D: Sell an equivalent number of lot's holding both simultaneously.

I have opted for Option D:

This means I have locked in a profit at $300.00.

What next?

My assumption is that we will move down but that the trend is up.

1) Let's say we move down 100 pips, but at 60 pips I buy back my sold lot's for a 60 pip profit. This 60 pip profit doesn't really net me any actual profit though, does it? Because I also owned the equivalent number of buy lot's, so as I gained, I also lost. However, once I buy to close, I only have my UP position left.

2) Now that I only have my UP position left, what is my cost basis? Well, since I had a debit position for 60 of the 100 pips down, my cost basis is no longer 1.6430, now it's 1.6370. And if we dropped 100 pips, I'm still 20 pips in the money.

3) Let's say we move up 100 pips. At this point, I may hold both positions and wait to see a correction before unloading my short lot's. If we continue to move up, worst case scenario, I miss the move, I buy to close and I sell to close my entire position for the original $300.00 profit.

I suppose I may not have been clear in explaining this, but I do hope it makes some sense. Ideally, we will move down some and I'll buy to close my short position and move my cost basis down on my purchased lot's.

isn't it just hedging?

Looks like we heading down for a bit huh...?

I still think we are in a triangle consolidation pattern. No idea which way this will break.

(EDIT: Chart is Hourly)

GBPUSD If 1.6469 Gap Is Filled Then Purely Its Short & Up to It Fall 1.6449 -1.6436

So far we bounced strongly off the bottom of the triangle and are headed back up.

(EDIT: Chart is Hourly)

It seems I'm all alone here and headed to bed. Wanted to draw the final closing hourly triangle.

Did it two different ways. One triangle is by the base of the candle, the other is by the wick. This way I'm not cheating.

Looks like we have a triangle consolidation breakout here. I'd like to wait another hour to confirm, but I have a day job.

For me the solution would have been to keep holding long regardless. I would not have hedged and if it came to the point where I had no choice but to hedge, I would not have done it until I saw a triangle breakout to the downside.

However, instead of hedging, my preference would have been to take partial profits and let the rest ride.