Cable: Bearish trading strategy
The basic idea behind this trade is that cable has posted a double-top at 1.6300 and that the bearish trendline resistance will withstand further tests before eventually turning lower for a retest of 1.5250. However we currently have a situation where barrier protection ahead of 1.5800 is stalling bearish momentum so the plan is to take advantage of this and hopefully this will allow us to take a much larger short position if/when the opportunity arises. Remember if you cannot afford the stop-loss amount then you should never take the trade.
- I’m basing this strategy on a maximum trade size of 20 units:
- Buy 4 units at 1.5870 with a stop-loss below the barrier at 1.5790:
- If done, sell 10 units at 1.6040:
- Sell a further 6 units at 1.6090, which would give me an average entry of approximately 1.6120 for 12 units:
- Stop-loss to buy 12 units at 1.6153 (basically I’m risking 80 pips on 4 units on the initial long position or 35 pips on 12 units once I turn short):
If the trade starts developing then I’ll post the trading sheet in the members section. It’s unusual for trades to develop exactly as planned so I will need some flexibility.