GBP/USD is one of the currency pair in Forex trading. If you think the British pound will do better against the American dollar you buy, if you favor USD you sell. Yesterday GBP did exceptionally well in just one minute as I was trading the currency pair together with USD/JPY and EUR/USD. The pair climbed 500 pips in a matter of seconds and I had just got long, which means I had bought, right from the beginning of the movement.
It is actually a 50 pips movement! I was so thrilled that I added up a zero! Sorry for that!
This is my trading graphs’ arrangement regarding a currency pair. Since I’m new to the Interactive Brokers interface, I haven’t tried trading any stocks yet and I focus on Forex trading until I get accustomed to the software. In the trading screen there are 4 graphs, 1 minute, 5 minute, 30 minute and 1 hour charts. All of them include the latest 100 candlestick bars at each scale. MACD is also plotted, which is a popular indicator in technical analysis.
My initial trade took place when the breakout at 1.51900 was confirmed in the 1-minute bar graph at the top left. The breakout is much more obvious in the 5-minute bar graph right next to it. By breakout I mean the rise above the last peak of a small downtrend that occurred between 12:00 and 13:00 in the 5-minute chart. I was at least hoping the currency pair to make it to 1.51950, which was the resistance it found when it took off. Depending on what would follow and the candlestick pattern, I would either close my position or let it ride.
It was actually the first time I experienced such a sudden spike and I believe that is why an unbreakable rule in forex trading is ALWAYS use stop loss orders. If anyone had been short at that point, meaning betting on a price fall, would surely have trouble exiting with small losses. As I am not trading on the trading graph rather on the so-called BookTrader, which is a ladder showing the unfilled orders at each price level, I witnessed rapid executions and order fillings.
Anyway, I traded out the moment the second bar in the graph began to form a falling candlestick. No need to get greedy and give back all that was handed to me!
The other two currency pairs I was trading also experienced sudden movements. The EUR/USD bar graph was like the candlestick graph of GBP/USD, and USD/JPY was exactly the opposite. I was also really close to profit from Yen as well but I had just traded out from a short position of mine.
