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Trading The Pound
By Laetitia Vaval | September 17, 2007
Today, I decided to mostly focus on the Sterling and more precisely on the GBPUSD in light of the recent financial turmoil Great Britain has been facing. One of Britain’s largest mortgage lender, Northern Rock has seen its customers rush to branches to withdraw their money as response to the bank’s financial trouble. At 7:37AM EST I decided to get long ( I had a very short term frame — about an hour or so max): I got long at 1.9987 and held the position for 16 pip up to 2.0003 and sold my lot there, expecting to see a reversal and watch the pound trade down in light of the recent economic events. However, it traded up further up to about 2.00294.
Finally, the GBPUSD broke down and traded down very rapidly all the way down to about 1.9913. I sold one lot at 2.0012. I made one major mistake, i bought my lot about 20pips lower, and seeing that it kept trading down sold it again, then bought it back again 20 pips lower. All in all the GBP traded down about 100pips over a very short period of time. However, I failed to make all the potential profits I could have made, and got in and out, in and out of a trade again, wasting tens if not hundreds of dollars by paying the spread several times and by selling off several pips lower than where i had just bought back.
On the chart above, you can see the GBPUSD drop about 100pips between 9:30 and 11:30ish.
Tags: dollar, dow, forex, forextrading, gbp, wall street warriors
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