On Monday morning I open the charts again. I live in a timezone where London Open is at 11: 00 AM so fortunately I don’t have to get up at the night to trade the London Session. The New York Open according to my local time is 5:30 PM. By 11:00 PM local time, the New York market also slows down. GBPUSD makes the high or low for the day between the times 2: 00 AM EST and 5: 00 AM EST which translates into 11:00 AM and 2: 00 PM local time for me. You should keep this important fact in mind if you want to trade GBP pairs like GBPUSD, GBPJPY, GBPZNZD etc. Once GBP pairs find the high and low between 2; 00 EM EST and 5: 00 AM EST, it trends in that direction for the day till the next day until and unless there is a very important news release which is only the FOMC Minutes release which happens only one time in the month. This means when a trend starts on GBP pairs it only reverses next day except only one day of the month which is the FOMC day.
However EURUSD is different. I have found with experience that EURUSD loves to make good moves at the close of the New York market sessions and the start of the London Market Session next day. Keep these facts in your mind. Two important news releases are the NFP Report and the FOMC Meeting Minutes. These 2 important news releases can start new trends on GBPUSD and EURUSD.
Let’s get back to our trade. On Monday I opened the charts, and take a look at the chart above. A bullish divergence pattern is forming on H1. We don’t need any indicator in fact. We can spot a double bottom pattern which is an important trend reversal pattern. I enter into a buy trade at the close of the H1 candle which is bullish. My entry price is 1.51879 and the stop loss is 1.51650. The risk is 22 pips. I have $1000 in my account. So I enter with a lot size of 0.1 lot which gives me a risk of $22 which means I am risking 2.2% of the account on this trade. I wait for the next H1 candle to close.