The Trade: EUR/GBP Short
Date: April 13 2008, 6pm
Entry: 0.7974
Lots: 5
Stop Loss: 0.8014
Target: 0.7944
Reason/Setup:
I entered this trade based on the OzFX setup on daily charts. The indicators lined up well and from the price action it seemed that the pair is poised for a move down. AC and AO were showing red candles, and the Stoch which was in oversold territory was starting to move down. Looked like perfect time to enter short. Since each pip on this pair was worth almost $2, I entered with 5 lots and placed the stop 40 pips away and target 50 pips away.
Result:
Like all other pairs, thisone had gapped lower too at start of trading on Sunday afternoon. And that probably caused the sell signal to be triggered on the OxFX system. The pair continued moving down after I entered the trade, but soon it got into the gap retracement mode. The price ws moving opposite to what the indicators were showing suggesting that this was a gap retracement rally. I should have known better and closed my position early and gone long this pair. Oh well.. Live and learn.
Date: April 14 2008, 3pm
Total Pips: -200
Profit/Loss: $395.31
Rating: 4
I did enter the trade correctly based on the setups. However I failed to place much importance to the gap retracement play and that cost me this trade.
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