Last July 17, 2011, I shorted the geppy since its rally at that time appeared to be cut short by the 50% Fibonacci retracement level of its most recent down wave. A presence of a hidden bearish divergence, where the price registers succeeding lower highs but the stochasatics mark consecutive higher peaks, plus an overbought condition signaled me that it was a good time to sell the Sterling pound for the Japanese yen (kindly see my initial trade here).
The trade actually went to my direction but not for roughly two weeks of sitting and waiting. As you can see from the chart above, the guppy just moved in a sideways fashion before eventually hitting my target price. Still, a win is a win and I came out with 164 pips.
As I’ve mentioned before, this particular technical set-up of retracement, divergence, and overbought/oversold condition is my bread and butter in forex trading. My batting average with this kind of trade is high and therefore I will continue to look for the same in my next FX trades.