We have just been stopped out of an open sell position we had on the FTSE100 which gave us a 3.12% gain after objective management throughout a five week long marathon! However, some of our clients made more!
As with all of our trades we recommend through our forex signal service, we had a series of reasons in support for a sell on this one and we were able to take advantage of it being at a twelve year high. Even though we mainly trade FX, we also provide our clients on the Ultimate forex training programme with FTSE100 signals along with other instruments.
We identified a bearish pin bar reversal on the weekly chart which closed on the 25th May 2013 at a level of resistance which hadn’t been broken in over a decade. This, to us, was a fantastic zone to anticipate those who were long on this instrument to cash out of their positions fearing that the bounce off the level was far more likely than the breakout to a higher price.
We used the bearish pin bar reversal on the weekly chart as our entry point for our short with an (signal FTSE100) entry at: 6638 and our protective stoploss at 6792. We always use a stoploss when we place trades just in case they turn and go the other way.
On the 27th May we were triggered into the trade – one which we would be in for the next few weeks. This was the weekly chart after all. True to form, the higher the timeframe, the longer typically trades take to come to fruition…or not!
On the 31st May we took this trade short on the FTSE’s weekly chart and sat patiently in this for five weeks.
In week 5, our first target was hit and some of our clients decided to exit for a respectable 6% gain. As we were pursuing a reward/risk profile of 15:1+, we held firm, trailing our stoploss strategically in order to lock in profit.
However, in week 6 the market retraced aggressively and knocked us out – at a 3.12% gain. Just as well we trailed our stoploss or we would have not banked any profit from this one at all!