(Partial video transcript)
This week’s trading opportunity
Axel Rudolph: Hello everyone and welcome to “Trade of the week” on Monday the 1st of December. And what I would like to do today is to go long EUR/GBP because I believe that the last few days has given analysts I should say enough time to analyse the UK budget from last week, and perhaps we will see movements that we didn’t see last week.
Also with Thanksgiving over last Thursday and Friday, many people weren’t really involved in the financial markets that much. So, we could see a reaction now and that’s maybe what we’re seeing today. We can see on the EUR/GBP chart that we’re already heading higher, having sideways trade for three days since the budget last week.
From a technical perspective, I like this trade simply because you can see from the May lows, we’ve got a very nice uptrend and we bounced off that. So, that is another reason for me to believe that the corrective move we seen from the high seen in mid-November might now have ended and that we’re heading back up again.
Now would I get in straight away? Probably not, because from a risk/reward perspective, my target is not that high. So right now, it would be a one-to-one reward-to-risk scenario. So I’d rather wait for a minor retracement towards £0.8775 for example to get back in with a very tight stop below last week’s lows here just below it at £0.8745 .
Previous weeks’ trading outcomes
I’d now like to talk about last week’s “Trade of the week”, which was to go long the S&P 500. You can see the horizontal line where we went long at on the chart in the video. Excellent trade! My upside target was 6,800 or above. So you can get out of this trade now, and also because it’s heading towards the end of the year. I’d like to keep my trading stats ideally above plus 20%, risking as you know only 2% of capital per trade. I think I’m going to cash this one in at 6,812.
And for the previous week from the week before last, I made a mistake. Yes, it happens to the best of us! So, basically I went long GBP/USD. We did so at the beginning of November. It went straight away in our favor, but we didn’t hit our upside target. And what I then did, is I moved my stop up from that low to the next lower low. And had I not done that, we would still be in profit now. But basically just got stopped out with a small loss here, and yes then then the market went higher again.
This week’s trade in summary
For this week’s “Trade of the week”, I would like to go long EUR/GBP. I’d like to do so at £0.8775 with a stop loss at £0.8745 and an upside target at £0.8815.