Tuesday, September 2nd 2014
“They may take our lives but they will never take our freedom!” – William Wallace
GBP/USD was smacked overnight and throughout the day for around 150 pips move downward breaching S1, S2, and S3 easily. This mess started when a YouGov poll of Scottish Referendum shows a boost on the “Yes” camp. This latest poll is showing No at 47% and Yes at 53%, a 6% margin. This was down from 14 points margin in the middle of August and an even higher 22 points in early August. Clearly the market is expecting No to prevail on this referendum but Scottish voters will decide just 16 days from now. Any surprises towards the “Yes” camp will send GBP/USD downward.
Having said that, I couldn’t capitalize the downward trend today (unfortunately) but I made a minor tweak on the EA to see if it can be better in filtering trades.
Trade 1 – Long GBP/USD at 1.66154
EA went long here after the price breached the daily pivot. Met with a resistance and a prompt move down the next candle. Was still busy following football transfers at this time and the trade got stopped out around 9:30pm Eastern Time for about -22 pips loss. At least I got stopped out and did not take the full 150 pips loss.
I was tempted to take the short trade but by around midnight here the pair has gone through its 5 days ADR so I thought the chance of further move down is small and I did not want to risk it. Alas.
CWB Tweak
Having said that, I was curious whether the EA has a setting to filter these small moves that usually happened early in Asian session. The EA always takes every trade that breaches through the daily pivot without question. I want a little safeguard to this and I only want to take the trade when the next candle moved to the direction of the trade at least 3-5 pips before I take the trade. Lo and behold There’s a settings called ClearancePips and I use 3.0 for this settings instead of the default value (which disables this feature). Thanks again, Hanover a.k.a David a.k.a Mr. Programmer.
That said, if we were to use this ClearancePips setting last night, I would have not taken that long trade but instead I will take the short trade on the very next candle as it moves 4 pips clear of the daily pivot. We shall see how this little tweak can perhaps stop us from trading fake breakouts or if price keeps straddling around the pivot area.
News Alert
BoE, ECB, and US Nonfarm Payroll later this week. Get ready for some volatility.
Trade well!
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