Cross-Eyeing: EUR/GBP – Trade Closed

Trade Closed: 2008-10-09 10:07

My stopped out at a loss in a frustrating manner as EUR/GBP made a high right at my stop before turning lower and falling below .7900. Doh!

Stopped out at .7955

Total: – 55 pips/ -1.0% loss

So, it’s a bit of a brain fart on my part as I probably should have made my stop a bit wider in current market conditions. But that was my trade plan and I’ll definitely make adjustments on my next opportunity. Stay tuned for my next idea!

Trade Idea: 2008-10-08 11:12

crosseyed chart

Just another, typical day in the life of a credit crisis as we see a coordinated global rate cut from five central banks. The ECB cut rates in the Eurozone to 3.75%, while the MPC cut rates in the UK to 4.50%. This sparked a strong move in EUR/GBP, and a possible opportunity to jump back into the downtrend. Let’s take a look….

Another simple Fibonacci play in a downtrend is my idea for today. I’d like to jump in short around the 61% Fibonacci level and it looks like conditions are overbought in the short term, as indicated by the stochastics.

So, are the rate cuts a game changer? Will confidence return to risk? Maybe not just yet in my opinion, so I’d like to go short. Here’s my plan:

Short EUR/GBP at .7900, stop at .7955, pt1 at .7845, pt2 at .7750

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

Stay tuned and good luck!

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  • comfibold

    There are certain pairs I don’t trade anymore due to blatant stop-hunting, and EUR/GBP is top of my list! After 3 consecutive losing trades I finally got the message and stopped trading it. I now stick with the majors instead.

  • comfibold

    There are certain pairs I don’t trade anymore due to blatant stop-hunting, and EUR/GBP is top of my list! After 3 consecutive losing trades I finally got the message and stopped trading it. I now stick with the majors instead.