GBPUSD: Nice trade, stopped out by stop hunt

22.30 bst

This week as I wrote earlier I’ve started another activity in the day to keep me from monitoring the markets all the time. As a consequence I have to put in hard stops in case of sudden reversals. Last night my nice GU trade was around 5130 about 70 pips in profit and since I needed to sleep I decided to put in a hard stop at BE+10 which is 5190.I went to sleep at 4.30 pm London time, and about an hour later the thin NY afternoon market went stop hunting. A sharp spike hit exactly 5190 and then fell back to 5150!  So I got just a 10 pip profit from what should have been at least 50-70 pips. Besides, it may go lower but I have lost my good entry, and a new entry around these levels is not very good in risk terms.

This is what happens all the time and the reason why I don’t like to use hard stops! I will have to reconsider my stops strategy.

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