There is lots of talk about the EUR, but we found a GBP trade just after the US economic releases. It seemed like last week, the US traders were the dominant movers of the majors and today was no different. The GBP formed a very wicky candle in advance of the US news, then began to decline right after it. It almost reached its session low, but reversed and began a run toward its session high. We closed the trade to protect our 40 pips.
If you are familiar with the game baseball, this analogy may make sense to you. If not, my apologies. I consider 10 pips getting to first base, 20 pips second base, 30 pips third base and 40 pips, a home run. I further consider 50 pips as hitting a home run bringing in one base runner, 60 pips a home run bringing in 2 base runners, 70 pips as a grand slam – which is hitting a home run with the bases loaded. Anything above 70 is just fantastic, but not common per trade, in intraday trading. In baseball when you make it to base, the fans cheer, if you hit a home run, the fans rise to their feet cheering and your team mates will high five you.
When I get 20 or more pips, I tend to protect them in increments of 10 pips, but sometimes the midpoint, 5 comes in handy too. There is no substitute for being able to reading price action, but protecting profits at acceptable levels or hiding stop losses above/below structure is very important in trading. Never get greedy, get the risk out of your trade as soon as is prudent to do so, and protect your profits, until the market takes you out or your targets have been hit.
Good luck with your trading!
Back tomorrow.
