GBPUSD FOMC Meeting Sell Trade SL 10 pips TP 300 Pips

If you want to trade GBPUSD then you should keep the risk as low as possible. GBPUSD is always on a rollercoaster. In a moment it can change direction go up 100 pips, hit your stop loss and then reverse direction again and fall 300 pips again. So always be careful when you are trading GBPUSD. Just don’t forget the GBPUSD flash crash in which it fell around 1000 pips in 1 minute then reversed and recovered most of the lost ground. Did you read the post on 5 Bar Reversal Pattern Trading Strategy? Take a look at the following screenshot of a recent GBPUSD sell trade.

GBPUSD FOMC Sell Trade

In the above screenshot you can see the red arrow, this was the entry. Now we only enter into a trade after a lot of thorough analysis. Once we have done our analysis on the weekly and the daily timeframe, we use H4 timeframe for making the entry. It is the habit of currency market that a pair will try to retest a recent level of support/resistance and come within 10-20 pips before it breaks out in the opposite direction. If you have understood this behavior of currency pairs, you can use it to make a very low risk trade.

You don’t need to watch the charts all day and know when price is going to reach your desired level. Do your analysis well. Read the charts correctly. Imagine what price will do in the event of FOMC Meeting Minutes in this case. Once you have made up your mind that price is going to behave like this, just use a pending order. That’s all. You can be wrong. After all price does not take orders from you. But you can be right as well. If you keep the risk low, most of the time you will be able to succeed with this trick. Read this post on a swing trade that made400 pips with a small 12 pips stop loss.

In the above GBPUSD FOMC Meeting Minutes trade, we had this idea that price is going to retest the previous resistance level. So we placed a pending sell order 10 pips below the recent resistance. Take profit target was 300 pips. Financial media was pretty sure that the Federal Reserve is going to increase interest rates in this FOMC Meeting. So we were sure price would move 400-500 pips at least. This we have learned through experience. So that was it. We placed the trade. Closed the computer and went to sleep. Next day when we checked the trade was there. Stop loss had not been hit. So we let it run its course. 300 pip profit target was hit and we made a trade with 30:1 reward to risk ratio. Did you download Forex Power Indicator FREE?

You must have understood our trading strategy by now. It revolves around risk management. Profit taking is the secondary thing. Stop loss should be small and it should not get hit. Take profit can be 100 pips, 200 pips or 300 pips. We take what the market gives but we focus more on the stop loss and the risk of the trade. Rest is all intuition and trading experience.

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