Retracement trade in the EURGBP

You know… sometimes I believe that patience is the most important virtue when it comes to trading.

It’s very difficult to be patient though, its far easier said than done.

But sometimes its the only way to be in the market and really have the odds in your favor, like it happened to me with this EURGBP trade, let me walk you through it…

Here is the short term chart:

EURGBP 1H

  1. The market was trading near a LT level (blue line), and as you already know, most of the times, when it trades near an important level the market tends to consolidate… So at this point I was waiting for the EURGBP to break either extreme of the range and then start looking for trade opportunities in the direction of the trade.
  2. This is the moment the market breaks through the bottom of the range, this is July 2nd. A lot of traders make the mistake of taking this as a breakout trade, I wouldn’t do that because around this level is where most false breakouts occur.
  3. Then the market retraced back to the ST resistance level, it was a shame I wasn’t around the computer at that time… But that’s how things are, you cant be monitoring your computer 24/7.
  4. Then, on july 10th, the market retraces back to the main ST resistance level and gives me exactly what I was looking for, a significant signal with downward pressure. Being patient paid off.

Here is the signal:

EURGBP Signal

Your Turn

What do you think about my signal?

Would you take that?

Do you agree with me that patience plays a very important role in trading?

Share your thoughts

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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 .

  • Budi

    Hi Raul,

    If I want to join this trade (EUR/GBP), where should I place my entry order? Should I wait or just enter my order now?

    Thanks.

    • Raul Lopez

      Right now I’d suggest you to wait until Monday to open your trade… I dont know, anything could happen during the weekend and it will be trading around your entry level…

  • Safree

    Hi Raul,

    Would you consider breakout of a ST swing high or low on the ST chart after a test of a ST S/R level as a way to enter a trade? In the case of the EURGBP retracement trade that would mean entering on a sell stop order near the ST swing low just below 0.7950.
    The risk/reward ratio would be inferior but I can enter the trade using sell stop order without being there when the candlestick reversal pattern formed near the ST resistance level.

    Regards,
    Safree

    • Raul Lopez

      Helo Safree,

      Yep, you can take that as your signal to go short…

      Good luck!

      PS. Thank you for your comment, I appreciate it!