GBPUSD is a lucrative pair to trade. But you must know how to trade this pair correctly otherwise you will get your fingers burnt. In this post we are going to discuss in detail a GBPUSD buy trade that made 200 pips in just 5 hours. Take a look at the following GBPUSD M30 chart.
You can see a strong bullish divergence pattern on M30. Divergence is a leading indicator unlike most other indicators that are lagging and always give you the signal when the move is already reached halfway. So we spot a bullish divergence pattern on M30. We make an entry on the bullish pinbar candle just above the up red arrow. Our entry is 1.54176 and the stop loss is 1.53900. So you can see our risk is only 27 pips. It is essential that we keep the risk below 50 pips. Divergences help us find low risk trades just like the above.
In the above screenshot you can see 2 indicators. One is the stochastic and the other is the MACD. This MACD is not available on MT4 but you can download it from Forex Factory website. You should also daily check the Forex Factory website Economic News Calender. Almost daily there is a major news item for GBP. This is the time when you can find a good signal to trade GBPUSD.
We closed the above trade just above the second red arrow at 1.56000. So our profit was 183 pips in just 5 hours. After that we closed the trade. Daily you can find trades like these. You can also build a pyramid and open more positions. For example we could have opened the second position at 1.54467 and moved the stop loss to breakeven for the first position at 1.54176. In this case our profit would have been 183+154=338 pips.
The first approach is the conservative approach and the second approach is the aggressive approach. With practice you can become an expert at the aggressive approach. You will become more expert when you will practice more. This is how forex trading is. There is always an element of discretion when trading. You cannot make everything 100% mechanical. With practice you can master the art of discretion and take correct trading decisions. Daily you can make 100-200 pips with this divergence strategy trading GBPUSD.