Trade Closed: 2009-04-27 18:30
What a bummer as EUR/GBP continued to rally higher beyond my entry price and hit my stop at .9050. The bummer part was that the pair made a high of around .9080 pips before dropping all the way down below .8900!
Total: -120 pips/ -1.0% loss
This was a frustrating trade as I was eventually proven right in direction, but proven a little impatient on entry. Lesson recorded in my journal and stored in the archives to hopefully never be repeated again. Stay tuned for more trade ideas!
Trade Update: 2009-04-23 08:44
Good morning! Since I posted my trade idea, EUR/GBP actually did make its way down to .8800 after resistance at the 50% Fibonacci area held. As I was about to close down my open orders, EUR/GBP shot up on Pound negative news. The pair shot up to trigger my short orders at .8930 and eventually found resistance just below .9000.
So, I’m in EUR/GBP and with sellers holding down the fort around .9000, we may see the trade return back to profitability and the pair return back to the down trend. Stay tuned for updates and adjustments as I may cut this trade off before the weekend to avoid event risk. Good luck!
Trade Idea: 2009-04-20 18:00
Good afternoon! Today, I am watching the EUR/GBP for a an opportunity to short! The pair has been on a down trend since hitting its last swing high around .9500, and the euro may be poised for further losses on fundamental data. Let’s take a look!
We are starting to see the euro sell off across the board as focus shifts to Eurozone weakness. Today, the euro has fallen against the Swiss Franc, the Dollar, and the Yen, and breaking significant technical support along the way. This could signal more weakness in the euro across the board.
On the chart, we can see the pair has been on a downtren, but recently found support around .8800. There is a bit of retracement on today’s risk aversion price action and with stochastics indicating overbought conditions the pair may be ready to resume the downtrend. I have also drawn Fibonacci levels and I like the 61.8% retracement level for my entry. My exit point is 120 pips – around the average daily true range of the currency pair. My profit targets will be around the previous support area seen on the chart and a support area last tested in early February. Here’s my entry and exit plan:
Short EUR/GBP at .8930, stop at .9050, pt1 at .8810, pt2 at .8660
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
We have lots of economic data from both the Eurozone and the UK. Check out our calendar for more details! Stay tuned!