All kinds of interesting things are unfolding right now. Some are tragic, like fighting in the Middle East, others semi-comical, just look at gas dispute between Russia and Ukraine. Some still are historic, and important ( for me) enough to mention them in here. Bank of England has just cut interest rate to 1.5%. This is the lowest levels in 315 years. History is made. It shows that BoE is not afraid to take drastic action. Unfortunately, they already lost the non binding race to zero, which I brought up a few times. There were critics of this move. Some market participants believe that economic conditions are now so strained that an even larger cut would have been warranted. I guess no matter what you do, not everybody will be happy. Such is life.
This was of interest to me because I have been taking a lot trades involving the Pound recently. GBP has been getting stronger for about a week with me on the right side of the market. The news itself, however, created only a large spike in Sterling, without a meaningful follow up. Move was widely expected, and everybody claims it was already “discounted” or “priced in”. Whatever.
Latest trade I posted here 2 days ago was a buy in GBP-AUD.
The move through my buy level of 2.0825 was powerful, and reached the target of 2.1150 fast. Nice 325 pips. And no, I don’t have any regrets about not holding it any longer and capture the rest of this move. I set parameters of this trade and stuck to them, with the desired results. Nothing to second guess.
I have to bring back fairly old post, “Story of EUR-GBP”. At the bottom of it there is potential trade on daily chart of EUR-GBP. Principle was simple, have a trailing sell order under the low of latest daily bar. Numbers talked about there are no longer valid, since the cross continued to go up for a while, but the principle was. At last, this trade was triggered on Wednesday a week ago. For longer term trades I use other broker, so the chart looks different, but here it is.
The fill was at 0.9670, with original objective at 0.8800. Two days ago, when this pair started to stall, I adjusted it to 0.8900. This was reached on the rate cut news. This is the biggest gain ever for me in this cross- 770 pips. So, a little bit of history is made for me. Under more typical circumstances one would have to wait a year for this kind of moves. Now it happened in a week. Strange times….
I will sketch some thoughts about EUR-GBP on Saturday, if anybody cares. There is one more trade from a few days ago to cover, but that has to wait till tomorrow. In the meantime I’m switching gears to NZD-CHF.
For whatever reason commodities currencies have been under pressure last 2 days. I’m sure somebody has a fine explanation for that. Decided to sell NZD-CHF. This cross gets very little coverage, but it is not too bad. Currently, it moves enough for a decent potential profit and the spread is not prohibitive- only 8 pips right now. My objective is 100-110 pips, although it might not happen before weekend. If this is the case, I’ll post my long GBP-JPY trades for Friday.
Mike K.
Very nice work. Congratulations.
Thank you.
See you also trade with OANDA. Have you been with them long? In their forums people complain a lot on a wide range of subjects. Are they a reputable broker?
There is an occasional slippage, but outside of that I don’t have any major issues with them. Had no problems withdrawing money.
Looks you are done with EUR-GBP. Any comments?
Mike, I have a question and hope it is not a dumb one. If you think that NZD/CHF is heading lower, why not sell it now, before price reaches where you placed the order. Wouldn’t this give extra profit?
Andy, I’ll comment on Saturday.
Your question is perfectly O.K. Heather. I mostly trade breakouts, for the purposes of this blog at least, so the price has to go through the breakout level in order to validate my view. I could have entered earlier, that would be a retracement trade, but the chart did not look compelling enough for me to do that. So I waited for move under the sell level. Price is moving away from it, so no trade, but at least I’m not in a loosing trade. Hope it makes sense.
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