Due to the decision of no tapering, US bears went out of steam and bulls came in with full force. I was searching for possible entry points into the GBP/USD in order to ride the trend. When the pair touched the 50 percent retracement level and stochastic was showing oversold signals on the 15 minute chart, I jumped in. After going long at 1.6074, I placed my stop loss at the 61.8 percent Fib level, which was 1.6010. My profit target was 1.6160.
As the day moved on, it was becoming clear that the selloff of USD was temporary. USD was gathering strength and bears were coming back. The outcome I expected did not materialize in the trading sessions. The positive reports of Philly Fed and Initial Claims and weak UK retail sales figure could be a major cause of this event. The possibility of an October taper established the dominance of USD once again.
Whatever the reason was, the fact is the Greenback emerged as the leading currency once again, while other currencies lacked the confidence. GBP/USD started going downwards. As a result, my trade was closed out at 1.6010, leaving me with a loss of 64 pips. Another loss for me! My analysis of the potential market behavior did not realize, though I have strong chances in favor of me. However, I know this type of trades will happen every now and then. I am confident that my analysis was right and I was following my plan accordingly.
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