What I learned from my 9 percent of return trade on the GBPUSD

Forex Currencies

About two weeks ago I got a signal in the GBPUSD, at that time, I set my stop entry order to go long based on a short term range breakout.

I decided to hold my trade over the last two weeks even during important fundamental announcements…

And finally, after almost 3 weeks, I got my alert: the market has reached my take profit order.

And you know something, it feels really good. Not because of the % of return (which by the way, it was awesome) but because even when I thought several times about closing it, taking partial profits, etc. I never deviated from my trading plan, and that feels really good.

It feels almost like at the crossing line at the end of a marathon. Just like that (alright… not that much)…

Anyway, here are a few things I learned during this trade.

Patience is the name of the game

When I opened this trade I knew the pound/dollar was more likely to continue its way up than going down. That’s all I knew.

You never know how much time it’s going to take the GBPUSD to get to my take profit order, no one knows – unless you got a working crystal ball, but most of them don’t work :)

The only thing that you need to do is to patiently wait for the market to hit your take profit order.

It pays to follow your trading plan

When you have a trading plan, all your trading decisions were made before your trade took place.

You know that if you follow your trading plan you’ll acting on your best interests.

And once you are in a trade, emotions kick in, they want you to take profits earlier, take partial profits, increase your trading size, average down, etc.

Dont do it. Just follow your plan and you’ll be fine.

I was tempted to take partial profits last week, just after the FOMC announcement, but I’m glad I didn’t do it. Because it would’ve been very difficult to get back in that trade (for a sound reason).

Of course sometimes you need to adapt, and take partial profits, etc. But make sure its part of your trading plan.

Dont take trading decisions at the heat of the moment, because I guarantee that they will not be on your best interests.

Fundamentals react in the direction of the sentiment of the market

Non farm Payrolls report

Well, at least most of the time they do.

There were plenty of fundamentals over the last two weeks and a half, but most of them made the GBPUSD go up, regardless of the actual figure.

Now, it doesnt mean that every single time this is how the market reacts to fundamentals… nope, most of the time they do, but it’s not a rule!

The most important fundamentals have the potential to change the sentiment of the market, so you need be careful alright?

Prophets from the past

When I wrote my update about my trade last week, I’ve got a bunch of emails saying/asking how come I didnt take profits earlier… that it was so clear that I had to close my trade at the swing high, etc.

This is what they mean:

GBPUSD Signal

Easy enough?

Yes, it’s easy to do it on the left hand side of the chart… the problem comes when you try to do it on the right hand side…

It’s impossible to try to capture every market swing.

And for that reason, the best thing to do is just to stick to your trading plan.

Your turn

What do you think about my trade? Did you take it?

If you did, what did you learn from it? If you didnt take it, what do you think about what I learned?

And finally… what’s your take about the prophets from the past?

Please comment below!

Good luck in your trading!

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Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

  • Angel Tee

    Raul, this definitely reinforced discipline in your trading. Thumbs up!

    • Raul Lopez

      Thanks Angel! It definitely did…

  • Dwayne Graham

    Great trade. I like the fact that you have so much discipline and you stick to your plan. Thank you so much for sharing

    • Raul Lopez

      Hey Dwayne, thanks for your comment… trading with discipline is the way to go!

  • Craig Hantke

    You have chutzpah (or nerve)! or cojones, I should say, Raul. Good job! now what are you setting your sights on?

    • Raul Lopez

      Hehehe Thanks Craig! There are a few currencies that I’m currently watching… I’ll keep you posted with a new post.

      • Waqas khan

        i am waiting

  • Ofer

    Hey Raul,
    Glad you made it.
    I wanted to ask you a question regarding this setup: You entered long at 1.5841 which is exactly the area of a big support from about Nov 15 (my birthday BTW). I wonder how did you take it into account. Did you even think that it might roll the market back down? In other words, how can one estimate the probability of such points to affect the market? Cause right now when I draw SR lines I find my self with a new grid of my own (LOL). So I teach myself to select only the most important, but in this example I was probably avoid the trade because of that support.

    Please teach me something so I can move on.

    Ofer

    • Raul Lopez

      Hey Ofer,

      I’m not taking that rejection into consideration because it wasnt a complete swing, that was just a retracement, a large one I must say, but at the end, a retracement…

      Just like the one we got in May – June 2013, it was a large retracement, but was just a retracement…

      You see what I’m talking about?

      Please do let me know.

      • Ofer

        I understand what you’re saying, and it gives me additional important understanding. However, why is it a retracement and not a real attempt of the market to go down, an attempt which was failed due to a support level?
        I would certainly consider it a retracement if it was a down fix in an uptrend, but the next high is not trending up, so I figure that I do not fully understand what is retracement unless it shows up in a trend. I’ll try to find some readings about it.
        Anyway, you gave me a good piece of knowledge here.

        Thanks

        • Raul Lopez

          No problem Ofer!

  • mueed

    MR,RAul: congrats………
    I follow This trade,and I am very thanks full to you for this good trade.and I hope that you shear more trade with us.

    • Raul Lopez

      I’m glad you did! Congrats!

  • Himanshu Dutta

    Thats great Mr. Lopez ! You are one of the best disciplined trader I have ever met !

    • Raul Lopez

      Thank you for your kind words Himanshu!

      Keep in touch!

      • Himanshu Dutta

        sure am glad to be in touch with you mr. lopez !

        • Raul Lopez

          Cheers

  • Chandana

    Congrats!

    “Fundamentals react in the direction of the sentiment of the market”

    -I also believe you are correct.
    What I have seen is, news in the direction of the market are ‘usually’ amplified and the news against the market are ‘usually’ discounted.

    • Raul Lopez

      I agree with you!

      Good luck!

  • tp

    Congrats Raul! Nope, I didn’t take the trade because it is not part of my trading plan.

    • Raul Lopez

      Hehehe lol! Just keep following your trading plan and you’ll be alright!

      Cheers,