fmfx:
GBP/USD managed to make a new low this session at 1.6024 to start the Christmas week of trading and complete the quarter to 1.6000 large quarter point and major whole number.
Next major ST support lies at 1.5801, the whole number preceding the large quarter point at 1.5750; then 1.5750 large quarter point itself; and lastly, 1.5701 - close enough to the 1.5700 whole number.
I was wrong to stand in the way of this train this morning trying to long cable. It was also unwise to trade the pair without adequate study at the start of the week to see if my plan from last week still holds. It did as price made its way to 1.6000 large quarter point, whole number, and major psychological level.
This morning, @50pips was wise to remind us that our number one rule is to preserve our capital in these kind of thin markets. As such with 1.6000 quarter completed, I am staying away from GBP/USD pair for the rest of the week, possibly through the end of the year. Merry Christmas lesson to me.
Besides, the risk:reward doesn’t make sense for me until price can find its way below 1.6000 and hold 75 pips below the whole number. Both those conditions must hold in order for me to take a trade on cable before 2010.
