Trade Update: 2012-4-18 03:18
Awww, it looks like the bulls have returned! After I closed the first half of my position at 1.3000, price immediately reversed and returned to my entry point. A win is a win though, so I guess I should be happy.
But I’d be lying if I said I’m not disappointed. I feel that I could have managed my trade better. If I took profit on both positions at 1.3000 I would have gotten a bigger reward-to-risk ratio.
Sold EUR/USD at market (1.3169):
First half closed at 1.3000: +169 pips
Second half closed at 1.3169: +0 pips
Total Gain: +169 pips / +0.53%
Ugh! I really have to work on managing my trades so that my account doesn’t see a repeat of what happened in the first quarter. Got any words of wisdom for little ole me?
Trade Update: 2012-4-13 02:20
As you can see, a doji and a bearish candle formed right after price tapped the 50.0% Fibonacci retracement level. I believe this is a sign that the bears are starting to jump in, especially with the Stochastic showing that the pair is oversold.
On the fundamental side of things, China’s GDP figures came in worse-than-expected at 8.1% versus the 8.4% forecast. I believe that the Asian superpower’s disappointing growth would weigh on market sentiment in the next few trading days as investors seem to be paying more attention to global economic growth now.
With both the technical and fundamental sides of this trade confirming my bearish bias, I sold at market (I got in at 1.3169) with a stop loss of almost 100 pips at 1.3270. I have yet to determine my profit target because I believe the pair will probably forge new lows. Let’s see how this trade turns out! Wish me luck!
Sold EUR/USD at market (1.3169), SL at 1.3270, PT to be determined, 1% risk
Trade Idea: 2012-4-12 00:07
EUR/USD just bounced off support around its previous low around 1.3050. In my own humble opinion, the pair’s recent consolidation looks like a bearish flag. I’m expecting the pair to resume its downtrend once it reaches the area between 1.3150 and 1.3200. Take note that this area coincides with the 38.2% and 50.0% Fibonacci retracement levels.
I have to admit though, I’m a bit scared. 1.3050 seems like a strong support level for EUR/USD. So, I’m gonna wait for confirmation. When reversal candlesticks materialize around the area, that’s the only time when I jump in and sell the pair. I would then place my stop a little above 1.3250.
I think the trade makes sense fundamentally too. There have been some recent bad omens that have kept risk trades at bay.
For one, China, the main country that has been driving economic growth since the financial crisis, is slowing quicker than initially expected. In March, the year-on-year growth of imports was a measly 5.3%.
Secondly, the yield on 10-year Spanish bonds touched 6% a few days ago as traders fear another debt crisis. And lastly, currency experts are predicting that the euro will probably drop by more than 5% throughout 2012.
To recap, I’m looking to sell EUR/USD based on the fundamentals, the technicals, and the overall risk environment:
Sell EUR/USD around 1.3150 and 1.3200, stop loss around 1.3250, profit target yet to be determined. Risk disclosure.
Now, let me go off topic and tell you a short story that I need some advice on. Yesterday, my sister and her boyfriend of six months broke up. The boyfriend apparently went to the house of his ex to give her a book without telling my sister.
While nothing happened between my sister’s boyfriend and his ex, the boyfriend lied to my sister when asked what he was doing at that time to avoid a long argument. Unfortunately, my sister found out that her boyfriend lied and decided to breakup with him.
While I am torn on the whole break up thing (the guy shouldn’t have lied but part of me thinks that my sister overreacted because he was just doing his ex a small friendly favor), I do not know how I should act towards the ex-boyfriend.
You see, he’s a good friend of mine but at the same time, my sister is… well, my sister. Will I be “betraying” my sister if I continue to hang out with her ex-boyfriend? Let me hear your thoughts, especially if you have gone through the same thing.