The chart above shows the pair GBPUSD on a 1-hour timeframe in the days before and immediately after the Brexit vote. The only indicator that’s used to analyze the Price Action and plan the trade is the Levels and Zones which is one of the most popular indicators for TradingView.
As you can see from the chart, in the days leading to the vote, the pair is on a rather strong uptrend.
However, 8 hours before the vote’s result came out, a new resistance forms on the chart (red horizontal line) and that’s the trigger to plan our trade to sell GBPUSD.
The Stop Loss level (red rectangle) is above the Buy Area determined by the Levels and Zones (green area behind the red rectangle). Our target, instead, is at least a retest of the support at 1.40444.
What happens when the vote’s result started leaking is that the price rises on the speculation that the Brexit was rejected but then, suddenly, it changes direction and makes a significant drop within a few hours.
The trade earned us 841.4 pips and 5 times the risk in just a few hours.
For instance, risking $1000 would have added $5000 to your trading account within hours.
If then, you would have moved down your breakeven level, maybe with a trailing stop, you could have earned an even bigger profit all the way down for about 1500 pips and 9 times the initial risk, hence $9000!
With just one indicator and well ahead of the news release, with Position Trading, it was possible to plan the trade and then sit down and relax until the target was reached.