Bullish GBP/USD Trade Prediction and Analysis
On May 9th we see price run below the low of May 6th and then quickly reverses back above the low (the stop hunt). Price then breaks market structure to the upside, as indicated on the chart by the grey arrow pointing to the right. If you read my previous post, then you are aware of what we are looking for as institutional traders once we see this type of price action, if you didn't you can read my previous post via the "Related Ideas" section at the end of this post.
Institutional traders directly highlight the bullish candle which initiated the stop hunt beneath the low of May 6th. This is our 1H bullish ICT breaker block and it is represented by the dark blue rectangle on the chart. Notice how price is currently accumulating within the breaker block (the calm before the storm). My entry was taken just below the equal lows of the May 10th 06:00 (UTC-4) candle and the May 9th 10:00 (UTC-4) candle. I placed my entry here because I expected price to stop hunt the sell side liquidity below these equal lows (this stop hunt is shown by the higher white line). Notice how the candle I entered on trades below the white line and then reverses, closing above it. This is the exact same phenomenon which occurred on May 9th and can be seen more clearly on a lower timeframe. My stop loss is placed below the close of the 1H +OB (represented by the light blue rectangle) giving the trade sufficient room to breathe. My target is placed above the current high of the week (represented by the lower green line) at the start of the imbalance formed on May 5th (represented by the upper green line).
The trade is framed on the weekly bullish order block equilibrium level. Price doesn't quite reach this level but given the market is currently trading within the 1W +OB the trade is still valid. The market could trade as far as the 1D -BB level represented on the chart by the red line before we see any selling return.
Note that GBP/USD is currently in a long-term downtrend and as such this is a counter-trend trade. Price could easily fall beneath the lows of May 9th and continue its downward trend. As traders, all we can do is follow our rules, buy and sell at levels which make sense and let the market handle the rest. If this trade loses I will not be bothered or angry because no system is perfect. A wise man called Mark Douglas once said "the trades we lose are the expenses we pay in order to be available for the trades that win," or something like that haha. The point is there will be losers and winners, as long as your winners pay more than your losing trades take away, you can make it in this business.
Thank you for reading and may the markets be with you.
Institutional traders directly highlight the bullish candle which initiated the stop hunt beneath the low of May 6th. This is our 1H bullish ICT breaker block and it is represented by the dark blue rectangle on the chart. Notice how price is currently accumulating within the breaker block (the calm before the storm). My entry was taken just below the equal lows of the May 10th 06:00 (UTC-4) candle and the May 9th 10:00 (UTC-4) candle. I placed my entry here because I expected price to stop hunt the sell side liquidity below these equal lows (this stop hunt is shown by the higher white line). Notice how the candle I entered on trades below the white line and then reverses, closing above it. This is the exact same phenomenon which occurred on May 9th and can be seen more clearly on a lower timeframe. My stop loss is placed below the close of the 1H +OB (represented by the light blue rectangle) giving the trade sufficient room to breathe. My target is placed above the current high of the week (represented by the lower green line) at the start of the imbalance formed on May 5th (represented by the upper green line).
The trade is framed on the weekly bullish order block equilibrium level. Price doesn't quite reach this level but given the market is currently trading within the 1W +OB the trade is still valid. The market could trade as far as the 1D -BB level represented on the chart by the red line before we see any selling return.
Note that GBP/USD is currently in a long-term downtrend and as such this is a counter-trend trade. Price could easily fall beneath the lows of May 9th and continue its downward trend. As traders, all we can do is follow our rules, buy and sell at levels which make sense and let the market handle the rest. If this trade loses I will not be bothered or angry because no system is perfect. A wise man called Mark Douglas once said "the trades we lose are the expenses we pay in order to be available for the trades that win," or something like that haha. The point is there will be losers and winners, as long as your winners pay more than your losing trades take away, you can make it in this business.
Thank you for reading and may the markets be with you.
Trade active:
Price has moved more than 85 pips in the anticipated direction. The stop loss has been moved to breakeven to take any risk out of the trade. Depending on where price is prior to the release of the inflation numbers I may close the trade.
Comment:
The stop loss was triggered at breakeven as the inflation numbers hit the market. This highlights the importance of taking partials when price moves in your favour.
