GBP crosses/Trade Ideas

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.

  1. Sean, for this strategy, how did you define the purchases levels at 1.6040, 1.6090 ? Those levels are matched with technicals points ? Or you define the average price you would wish to have and the resultats are 1.6040, 1.6090 ?

    Thanks

  2. Hi Papillion, the sales I guess you mean? I’m trying to have a sizeable position with a s/l clearly above 16100 so that’s really my main driving factor. I did have quick look at charts but levels are more driven by p/l concerns

  3. I have a confuse, when you get short done at 1.6040 or 1.6090, do you still hold 4 unit long positions? or you plan to exit these 4 unit long some where?

  4. Hey Jack, this is where there is a difference between retail and pro platforms. When long 4 and I sell 10, then I’m 6 short. When I sell another 6 then 12 short. Don’t quite understand how retail platforms work when you can have long and short positions at same time? Surely they should nett out?

  5. it’s the same at the end of day, Jack. Only use broker to execute trade, while using excel or Sean’s spreadsheet to track trade.

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