Basic Details Of The Setup
An inside day is observed on the 13th of November 2019.
GBP/USD is in a temporary ranging market. The inside bar formed above the EMA 20 line. The mother bar touched the EMA 20 and closed above it. It is a pretty good indication that the price might go higher based on the price action. Now let’s find out whether the range of the mother bar is eligible for a trade setup.
The mother bar details:
Range: 112 pips
The ATR (14) in the last 14 days:
High: 162 pips
Low: 75 pips
So from the detail, I see that 112 pips are between 162 pips and 75 pips. It is eligible for a trade setup.
The lot size calculation:
Our stop loss is $140. So the lot size is $140/112pips = 1.25 lot.
The pending order:
Because the inside bar is formed above the EMA 20, so we will only place a buy stop order.
Buy Stop 1.25 lot @ 1.2897, SL: 1.2785, TP: 1.3121
Progress Of The Orders
Day 1: 13th November 2019
At the end of the day, a small candlestick is formed. It is another inside bar. The market has not decided to move yet. Since the price is closed above the EMA 20, the pending order is still valid.
Day 2: 14th November 2019
A small bullish candlestick forms and it is a third inside bar. It shows a tendency for upward movement. No trade is triggered yet. The market is rather quiet.
Day 3: 15th November 2019
My trade is triggered but not at my desired price of 1.2897. A slippage happened. It triggered at 1.2905. In that case, I adjust the SL to 1.2793 and TP to 1.3129.
Day 4: 18th November 2019
It was a bullish day. The price closed above the buying line which resulted in a floating profit.
Day 5: 19th November 2019
The market was uncertain and at the end of the day, it formed an inside bar. This shows that the market is having a short pause before it continues to any direction.
Day 6: 20th November 2019
The price has broken the previous inside bar in the bearish direction and closed within the mother bar at the end of the day. The position is still in the floating profit.
Day 7: 21st November 2019
The price was struggling to break out the inside bar formation towards the downward direction. Even though it managed to break the inside bar, but it closed within the mother bar for another day.
Day 8: 22nd November 2019
The bear has unleashed its power. Today was a big bearish day. If the price would have moved a little bit more bearish, the position would have been closed. But it wasn’t the case. The position survived.
Day 9: 25th November 2019
The bull has taken its place today. It is a net bullish day. It formed an inside bar and canceled off almost every loss from the day of yesterday. It was a good day for us.
Day 10: 26th November 2019
It formed another inside bar today. It shows that the market is uncertain of its direction and it is consolidating. There might even be a breakout for the next day.
Day 11: 27th November 2019
The price has closed high today and broke the mother bar of yesterday inside bar. This is good for me because I have now a floating profit and the market is perhaps in favor of my trade setup.
Day 12: 28th November 2019
After yesterday’s bullish movement, the market tried to go higher but it ended up closing low forming a small bearish pin bar. The setup is however still profitable.
Day 13: 29th November 2019
The market made a downward movement before it closed higher than yesterday. We are having a positive floating profit for now. One thing worths noting is that it is a Friday and when the market is back on Monday, it can do whatever it wants. Normally it is dangerous to have an open position over the weekend.
Day 14: 2nd December 2019
As I thought, there was a big opening gap. At the end of the day, the market has closed that gap and formed a pretty bullish candlestick.
Day 15: 3rd December 2019
Today is a good day for us. The USD was very weak and we have a bull run for the whole day. The price closed higher than yesterday.
Day 16: 4th December 2019
Today the market is fantastic. The bull has taken control of the market. It is very bullish. We are a few pips away from the goal.
Day 17: 5th December 2019
Another day of bull run and we have hit the take profit! It is a nice trade.