3 Dec 2014: GBPUSD daytrade

This was a pretty dumb trade. The London session had just started and price looked to be going down.

However, there were a few obstacles:

1) There was a major multi-day support level around 1.56000

2) Four big news items were coming out later in the session

Because 1.56000 was a multi-day support level, this meant that there'd be longer-term buyers moving into the market and bidding against each other to get their longs filled. 

Also, the upcoming schedule of big news releases meant that many short-term traders would be staying out. 

This combination meant that price would likely be choppy and non-directional. If it was going to move down, the downward move would be short-lived and unpredictable as longer-term bulls tried to fill their longs.

Despite this, I looked for an opportunity to go short. Price had just broken yesterday's low, but then quickly retreated upward. To me, it looked like a failed breakout. I was looking for yesterday's low to break fully, and go short on the retracement back to yesterday's low. 

Price did break yesterday's low again, pushing price lower than previously, but not by much. However, I was getting itchy and classed it as a sufficient breakout, so I looked for a retracement to get in short. 

The retracement did occur and I went short at a good price, but price quickly rebounded upwards. I moved my stop loss to breakeven, then manually closed at a profit of 0.3R.

Intuitively, I knew this was a dumb trade. There wasn't much that supported going short in the near-term. Many short-term bears would be staying out until all the big news items are released, leaving only longer-term bulls in the market. 

I decided to sit the session out after this. 

(click to enlarge)