Technical analysis GBP/USD

[teodor87]

Free advice.
NB: It's a suggestion! Trade at your own risk!

The GBP/USD pair was way oversold for the last couple of months. It has broken out the 1.5350 point.
My advice - on a pullback open a position for at least a month or two - it is going to rise up to 1.65 - 1.73

Thats 1500 - 2000 pips.

If you open a position for 100000GBP (1 standard lot) You'd be winning 15000 - 20000$ for 2 months.
Not bad, a?

Free advice.
NB: It's a suggestion! Trade at your own risk!

[teodor87]

Update 11.04.2013 - 14:57- Sofia Time: - Price is now 1.5404 - already 54 pips up. That's 540$.

PS: I trade with 1:500 leverage. So a standard lot would require 200GBP ~ 266$ to open the position and another 2000$ (~900%) for liquidity.

[teodor87]

Update 11.04.2013 - 23:34 - Sofia Time: Closing price is 1.5385.

This is a good sign. Means that market remains above 1.5350 for the daily close and this is going to attract buyers.

Tomorrow a slight pullback is expected. If it doesn't happen until 12:00 GMT, then it could spike again with another 30 - 40 pips.

[teodor87]

Update 12.04.2013 - 17:19 - Sofia Time: Pulled back to 1.5361.
If it closes above 1.5350 it looks like a huge buy opportunity for monday.

Next week I think it will go as high up as 1.5450 - 1.5500 with a pullback to 1.5420.

If it breaks 1.5500 next week it means that it could go as high as 1.5700, even 1.6000.

It will definately go up to 1.63 in the next 4 - 5 weeks. And 1.66 - 1.67 in the next 2 months.

[theta]

No updates lately. Are you stopped out yet?

[ManBearPig]

I'm a little out of my depth here but I agree with your sentiment. The loss of the AAA rating definitely helped suppress the value of the pound against the dollar.

[teodor87]

No a couple of hundred back. But it is going to 1.65 in two months.

[teodor87]

Update 25.04.2013 - 10:06 - Sofia Time: Slight pullback to 1.5313. Nevertheless market should not go lower. By now I am at -370$.



If it breaks the 1.5350 again it will be a huge buy opportunity.

[theta]

Update 25.04.2013 - 10:06 - Sofia Time: Slight pullback to 1.5313. Nevertheless market should not go lower. By now I am at -370$.



If it breaks the 1.5350 again it will be a huge buy opportunity.

No a couple of hundred back. But it is going to 1.65 in two months.

Not really. Based on what you said before, you should be down more than "a couple of hundred"

If you open a position for 100000GBP (1 standard lot) You'd be winning 15000 - 20000$ for 2 months.
Not bad, a?

Free advice.
NB: It's a suggestion! Trade at your own risk!

Update 11.04.2013 - 14:57- Sofia Time: - Price is now 1.5404 - already 54 pips up. That's 540$.

PS: I trade with 1:500 leverage. So a standard lot would require 200GBP ~ 266$ to open the position and another 2000$ (~900%) for liquidity.

So, when it was trading below 1.5250 for the last 5 days, you should be down more than a thousand and therefore stopped out of the trade (given the 500:1 leverage).

[teodor87]

Leverage means that my margin levels are lower and I can open a position with a lot less money than I have. It has nothing to do with per pip profit.

If position size is 0.1 lot 1 pip profit/loss equlas one dollar. For 1 lot, 1 pip is 10$ of profit/loss. Period.

Leverage gives me the opportunity to open a position with smaller risk.

For instance - if leverage was 1:100 i'd need 1530$ to open a position. With leverage 1:500 i open the same position for 300$, thus significantly lowering the risk of margin call. Stop out level is 10%. Meaning I have to have less than 30$ in my balance.

And I opened my position at 1.5350. Now it is 1.5288 - it fell from 1.5317 this morning, so now I'm 620$ back.

However in 2 months I will be cashing +15000 - 20000$ out.

[teodor87]

By the way it is now 1.5404 so I'm +540$.

[theta]

I honestly hope you are right, as I would personally be very glad if GBP/USD goes to 1.65.
But you are contradicting yourself. You say that:

With leverage 1:500 i open the same position for 300$, thus significantly lowering the risk of margin call. Stop out level is 10%. Meaning I have to have less than 30$ in my balance.

And I opened my position at 1.5350. Now it is 1.5288 - it fell from 1.5317 this morning, so now I'm 620$ back.

As per your numbers above, you got a margin call. If you hadn't come up with additional funds immediately, you would have been stopped out. FYI, the priced dipped to 1.5197 at some point 2 days ago. At that point, you lock a loss.
Increased leverage doesn't decrease the risk of margin call, it increases it.

[teodor87]

I honestly hope you are right, as I would personally be very glad if GBP/USD goes to 1.65.
But you are contradicting yourself. You say that:

With leverage 1:500 i open the same position for 300$, thus significantly lowering the risk of margin call. Stop out level is 10%. Meaning I have to have less than 30$ in my balance.

And I opened my position at 1.5350. Now it is 1.5288 - it fell from 1.5317 this morning, so now I'm 620$ back.

As per your numbers above, you got a margin call. If you hadn't come up with additional funds immediately, you would have been stopped out. FYI, the priced dipped to 1.5197 at some point 2 days ago. At that point, you lock a loss.
Increased leverage doesn't decrease the risk of margin call, it increases it.

You obviously know nothing about forex. Increased leverage decreases the risk of margin call. Why? Because you need less money to open a position with the same profit/loss per pip, which leaves you with more room and way higher margin level.

Margin level is the corelation between the margin required and the free margin (available cash). You divide the cash by the money needed to open a position. And the percentage represents your margin level.

For instance. I needed 300$ in order to open my position. I have 5grand - which leaves 4700$ free margin. So my margin level is 4700/300 * 100 = 1566.66%.

Margin level has to be 10% in order to stop out. Right now it's almost 2000%, since I am already at 1000$ profit, and I put a stop loss at a higher level of position value.

Of course if one is a greedy idiot an opens an insanely huge order that creates risk, but it is not due to leverage. It's because of stupidity.

I have 5 grand in my account so I could take up to 467 pips of loss before margin call.

I do not follow the chart 24/7 I just check it every morning.

[teodor87]

GBP/USD closed at 1.5482 after a very strong session with a rise of more than 140 pips.