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Trading British Pound 2013-02-11

I am long the British Pound. In this example of currency trading, I have identified what I believe to be bottoming action and I have taken a long position using daily charts in the Pound.

I have been keeping my eye on this currency for a few days, as I suspected some type of bottoming action to occur. I decided to enter my position this afternoon.

I bought the pound at 1.5655 at 16:25 my time. As always, I am using a stop loss order to limit my risk exposure. I am looking for a multi-week move from this trade. Although, I will exit earlier if I must.

As we all know, most of these more heavily traded currencies seem to trade in a longer time-frame trading range. I am feeling the pound is in its lower ranges right now. Also, I have noticed the pound is particularly sensitive to MACD divergences on the daily time frame. Other currencies, in which I have found this to be true, are the Australian dollar and the USDX. 

One currency that seems to fail to respect trading ranges is the Japanese Yen. Or maybe it just has a really wide and loose range, who knows. I've only ever traded the yen once, and it was a fairly profitable trade. I'm not really looking to get into that market, at all. Currency trading can be tricky, you know.

Let us observe a daily chart for the March contract of the British pound.

trading British pound currency trading

Here, I have circled the areas that I believe are displaying bottoming action. You could argue yes and no as to whether or not this is an "MACD divergence", but I am following my gut and experience and I have entered my position. Ideally, I would have liked to enter below 1.5627, and prices may yet reach that low today (tomorrow). As I said, I followed my gut and made my move. 

My positioning is based not only on this price action, but also on some COT data that I have been following. Combined, I felt compelled to take my place.

Again, I have a stop loss order in place, in case my trade turns out to be a disaster. That way, even though the trade was a disaster, it will not be a disaster relative to my account balance. Always trade with stops. 

Learn to use stops effectively. I will, at some point, be writing about this topic.

In Other Markets: Gold, Sugar, Cocoa, Crude Oil

I am still long gold. We have seen a lot of volatility within a trading range in this market over the past two months. I am still of bullish sentiment here, although my faith seems to be getting tested a lot. For now, I am still long and of bullish sentiment in the gold market.

I am very seriously considering taking on a long sugar position with the slightest pullback, even of just 0.20 pts. This is a market I am watching VERY closely.

I am looking for a long position into cocoa. If we see a new low in this market, I'm gonna be on that like a dog in heat. Well, maybe not, we'll see.

I am looking to short crude oil. This is probably my most foreseeable preferred trade of the time being. However, its not quite time yet.

Follow this futures blog to keep up to date with my latest trades.


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Futures Trading Blog Posts

posts listed chronologically below



2013-04-08 Short Natural Gas

2013-03-10 Dollar Index

2013-02-17 Crude Oil

2013-02-11 British Pound

2013-02-03 Gold & Updates

2013-01-21 Gold Trade

2013-01-14 Natural Gas

2013-01-14 Gold Update

2013-01-07 Sugar Trade

2013-01-04 Gold Update

2013-01-03 Natural Gas

2012-12-28 Gold Prices

2012-12-26 Natural Gas

2012-12-24 Updates

2012-12-12 Sugar Trade

2012-12-06 Dog Video

2012-12-06 Gold Re-entry

2012-12-05 Natural Gas Update

2012-12-04 Natural Gas

2012-11-29 Gold

2012-11-19 Updates

2012-11-06 Natural Gas

2012-11-01 Natural Gas

2012-10-28 Gold Futures

2012-10-23 Natural Gas

2012-10-22 Sugar, Re-entry

2012-10-18 Sugar

2012-10-17 USDX, Sugar, Gas

2012-10-15 Natural Gas Futures

2012-10-12 Natural Gas Update

2012-10-10 Natural Gas

2012-10-04 Sugar Exit

2012-10-01 Sugar Update

2012-09-25 Natural Gas, Sugar update

2012-09-20 Sugar

2012-09-20 Natural Gas

2012-09-12 Canadian Dollar

2012-09-11 USDX

2012-09-10 Natural Gas

2012-09-09 Natural Gas, DX, GC, SB

2012-09-05 Sugar Futures

2012-09-04 Canadian Dollar

2012-09-01 Gold, Dollar Index

2012-08-24 USDX, Sugar, Gold

2012-08-19 TRADE Sugar

2012-08-16 TRADE Sugar

2012-08-12 10yr T-Notes

2012-07-30 TRADE: AUD/USD

2012-07-23 TRADE: USDX

2012-07-18 TRADE: US Dollar Index

2012-07-17 TRADE: AUD/USD

2012-07-15 10 Year Treasuries

2012-07-06 Sugar Futures

2012-07-02 TRADE: Australian Dollar Futures

2012-06-27 TRADE: Sugar Futures

2012-06-25 TRADE: US Dollar

2012-06-22 TRADE: US Dollar

2012-06-21 TRADE: Gold, Sugar

2012-06-18 More on Gold

2012-06-12 Gold Update

2012-06-12 TRADE: Dollar Index

2012-06-11 TRADE: US Dollar

2012-06-07 TRADE: Gold

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