Another 100-pip trade with GBP/USD

One handy way which can be used to capture upcoming trends is to make use of a long-term EMA together with a shorter-term EMA on a 4-hour chart. A 4-hour chart tends to give less “noise” in the predictability of an upcoming trend. The profit achieved is often in excess of 100 pips; the stop-loss should be placed at about 40-50 pips away. One could confirm the trend by referring also to the 1-hour chart, and a couple of indicators, e.g. Stochastic Oscillator or %R.

Trading using a 4-hour chart involves capturing larger trends, and thus often entails holding the trade for many hours; in many cases the position is held over one or two days.

On 26 Nov I did a long trade that was entered when the 5-period EMA had just crossed above the 50-period EMA. A profit of 96 pips (after factoring in the 4-pip spread) was readily achieved after about 1 day.