Ok. Maybe such a short-term GUESS isn't a well thought out strategy then. I'm talking about betting that the previous days GBP move was an overreaction. Which leads me to my first problem: I don't know what logical basis to place my trades on. Even if I think something makes sense, it may just be deluding myself. Should I be looking only at TA for this? That doesn't make perfect sense to me (if any).
REALITY CHECK: If this were real money, I would have lost 8.9% of the $100,000 I bet today. Roughly $8,900 gone just like that in a matter of 6 hours. Although if I had profited $8,900 I would feel like a genius and have a false sense of confidence in my abilities to spin a roulette wheel. Also reality check: If I plan to hold these trades for 12 months, there's a good chance they will be in the positive at some point during those twelve months. But then I better not need that money for something else.
I’ve never dabbled with news/fundamental/macro trading or dabbled with forex. Forex tends to trend more as the macro economics behind don’t usually just change on a whim. If you want to take a economic view on forex, perhaps look at expanding the hold time and position sizing according to the hold time expected. Problem is forward testing this way takes a long time and backtesting off fundamentals is even harder trying to find the data and using it.
It is absolutely certain that macroeconomics is what moves the Forex market in the long-term. I will probably make a post about this soon. You can see sharp changes in almost every chart on key dates. Most pairs change drastically around December 2007, the start of the financial crisis. The GBP pairs trend along with key dates in the Brexit saga. USD pairs improve on Trump election date, etc.