April 19, 2008

Weekly Trading Update - April 14-18

Forex trading can seem very easy at times, and this was definitely the case this week. I only took two positions this week, both on the GBP/USD pair, and both went perfectly to plan.

The first position was taken right at the start of the week on Monday morning. I was looking for short positions as the daily Supertrend was indicating we were in a downtrend, and thankfully the perfect opportunity presented itself when the EMA (5) crossed downwards through the EMA (20) on the 4 hour chart.

I entered at 1.9729 and closed half my position at 1.9665 and let the other half run, eventually closing at 1.9620 after it struggled to break through 1.9600, so that was a very nice points haul.

My second position was taken on Thursday morning. The 4 hour chart of the GBP/USD was showing a very nice consolidation where both the EMA (5) and EMA (20) had flattened out and the price was sticking close to these two indicators.

This usually only means one thing - a strong breakout is imminent. So it's just a case of being on the right side when it does breakout from this tight trading range.

The first move turned out to be upwards and although I was still looking for short positions, it's hard to ignore breakouts, so after waiting for a slight pullback I entered at 1.9788 and watched on as it continued it's upwards surge.

I would have closed half the position early, like I normally do, but it looked like it was going to comfortably cross the EMA (200) level at around 1.9840 and so I let it run until 1.9900 when I closed the entire position.

I often close positions when we reach round numbers as these usually act as strong targets and resistance levels, but on this occasion it smashed through and I missed out on another 100 points, but I'm not worried about that as it was still a very profitable trade.

So overall it was one of the most profitable weeks of the year for me.

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