British Pound / U.S. DollarEducation
Trading GBPUSD and NZDUSD | Judas Swing Strategy 30-03/01/25
The past week offered a subtle reminder that trading isn't always about pushing the buy or sell button. Sometimes, when market conditions are less predictable, it is advisable to sit back and concentrate on tape reading to allow market to reveal its intentions before engaging in trades. During the festive season and approaching the New Year, the market often exhibits erratic behaviour, making trading a bit difficult, and traders are often slaughtered under these conditions. Using the Judas Swing strategy, we scouted for trades during this period to evaluate how the strategy would perform under these conditions.
On Monday, we did not find any trading opportunities on the four currency pairs we were monitoring. Fortunately the next day, we saw a potential trading setup forming on GBPUSD which caught our attention. We saw a sweep of liquidity on the sell side, signalling potential buying opportunities on GBPUSD. This followed a break of structure to the buy side, that price leg also left behind a fair value gap (FVG). With these conditions aligning, all we need is a retrace into the FVG to fulfil the entry requirements on our checklist.
Twenty minutes later, we saw the retracement needed to enter the GBPUSD trade, triggered by the candle that closed within the FVG. We executed the trade with a 1% risk allocation from our trading account, aiming for a 2% return on this setup.
This trade barely showed any profit before hitting our stop loss within twenty five minutes, leaving us down by 1% for the day. Did losing that amount bother us? Not at all. We were fully comfortable with the risk we had allocated for the trade.
Wednesday didn’t present any trading opportunities, but on Thursday, we identified a promising setup on AUDUSD that we were eager to capitalize on. Once the price retraced into the FVG and all the requirements on our checklist were met, we executed the trade, risking 1% of our trading account with the goal of achieving a 2% return
The AUDUSD trade came within a few pips of hitting our take profit (TP) before reversing and going the other way. From our backtest data, we’ve observed that taking partial profits negatively impacts the strategy’s overall performance over time. Instead, allowing trades to play out fully either hitting the stop loss or the take profit has consistently delivered better results in the long run. While reviewing our data, we also noted that it’s not uncommon for trades to come very close to hitting TP, only to reverse and hit the stop loss. Although this doesn’t happen often, it’s a pattern we’ve seen before during our backtesting sessions, so it wasn’t surprising when it occurred here.
Taking a loss like this can be emotionally taxing, especially if you risked more than you could afford to lose or weren’t prepared for such scenarios due to a lack of backtesting. That’s why we can’t stress enough the importance of backtesting—it allows you to observe various scenarios in action and equips you to handle these situations more effectively.
Friday didn’t present any trading opportunities, leaving us down 2% on our trading account for the week. However, we’re okay with this outcome, knowing that one good trade can offset those losses.
On Monday, we did not find any trading opportunities on the four currency pairs we were monitoring. Fortunately the next day, we saw a potential trading setup forming on GBPUSD which caught our attention. We saw a sweep of liquidity on the sell side, signalling potential buying opportunities on GBPUSD. This followed a break of structure to the buy side, that price leg also left behind a fair value gap (FVG). With these conditions aligning, all we need is a retrace into the FVG to fulfil the entry requirements on our checklist.
Twenty minutes later, we saw the retracement needed to enter the GBPUSD trade, triggered by the candle that closed within the FVG. We executed the trade with a 1% risk allocation from our trading account, aiming for a 2% return on this setup.
This trade barely showed any profit before hitting our stop loss within twenty five minutes, leaving us down by 1% for the day. Did losing that amount bother us? Not at all. We were fully comfortable with the risk we had allocated for the trade.
Wednesday didn’t present any trading opportunities, but on Thursday, we identified a promising setup on AUDUSD that we were eager to capitalize on. Once the price retraced into the FVG and all the requirements on our checklist were met, we executed the trade, risking 1% of our trading account with the goal of achieving a 2% return
The AUDUSD trade came within a few pips of hitting our take profit (TP) before reversing and going the other way. From our backtest data, we’ve observed that taking partial profits negatively impacts the strategy’s overall performance over time. Instead, allowing trades to play out fully either hitting the stop loss or the take profit has consistently delivered better results in the long run. While reviewing our data, we also noted that it’s not uncommon for trades to come very close to hitting TP, only to reverse and hit the stop loss. Although this doesn’t happen often, it’s a pattern we’ve seen before during our backtesting sessions, so it wasn’t surprising when it occurred here.
Taking a loss like this can be emotionally taxing, especially if you risked more than you could afford to lose or weren’t prepared for such scenarios due to a lack of backtesting. That’s why we can’t stress enough the importance of backtesting—it allows you to observe various scenarios in action and equips you to handle these situations more effectively.
Friday didn’t present any trading opportunities, leaving us down 2% on our trading account for the week. However, we’re okay with this outcome, knowing that one good trade can offset those losses.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Innovative all-in-one trading and backtesting platform
cleo.finance
Test trading strategies on crypto, stocks, indices, forex with decades of 1-min data.
cleo.finance
Test trading strategies on crypto, stocks, indices, forex with decades of 1-min data.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.