EURUSD – Ranging? – Closed Trade

Closed Trade: 2009-11-26 21:22

PoD Chart

Boo. The FOMC meeting minutes did quite a number on the markets yesterday as it encouraged currency traders to diversify out of the dollar. The EURUSD, in just one day, broke out of its range, set a new yearly high, and hit my stop loss in the process.

Trade closed at 1.5100.

1st Half: -100 pips / -0.50% loss
2nd Half: -100 pips / -0.50% loss
Total: -1.00% loss

It looks like the pair has topped out though and is starting to retrace some of its gains. It could head all the way back to 1.5000 but I’m not too sure. If risk appetite remains strong, we could see another move without a retest.

Anyways, I’ll be heading to bed now… Can’t wait for Thanksgiving! Yummy, yummy, yummy turkey! Oh, by the way, just a heads up: I’ll be doing an HLHB update tomorrow so stay tuned for that! Something for you guys to read over the weekend.

Trade Idea: 2009-11-24 21:57

Good evening readers! After my last two winning trades, I’m starting to gain some confidence in this trading business. I think it’s time to get my feet wet again and jump right back in the markets! This time, I’m going to trade the grand momma of all currency pairs – the EURUSD.

PoD Chart

On Monday, we saw how risk appetite managed to boost higher yielding assets… which, as usual, proved to be harmful to the value of the dollar. However, trading was mixed yesterday, keeping a lot of major currency pairs stuck within their trading ranges. What could that mean for today? More ranging behavior? Perhaps it’s time for traders to unwind some of their dollar shorts? Could we finally see some profit taking before traders head back home and celebrate Thanksgiving by eating some turkey?

In addition to this, the US GDP was revised down to 2.8%, signalling that growth wasn’t as fast as economists initially thought. This helped taper risk taking, helping the dollar find some buyer support.

So for today’s trade, I’m taking one from Big Pippin’s playbook! Notice how the EURUSD has been moving sideways between the 1.5000 and 1.4825 range for the past couple weeks. Zooming closer, I noticed that the pair is already nearing the 1.5000 resistance. Also, by the time the pair reaches this level, stochastics would probably be in the overbought region, indicating that sellers could jump back in any time soon.

While it is true that there are a lot of data coming out tonight that could cause some volatility in the markets, I don’t think it’ll be enough to push the pair significantly past the 1.5000 handle. In my opinion, even if all the economic data comes out better than expected, price wouldn’t go all that far.

Will “history repeat itself”? Who knows? So I guess we’ll all just have to wait and see how my trade idea pans out!

Here’s what I will do:

Short at 1.5000, pt1 at 1.4900, pt2 at 1.4800, stop at 1.5100. I will be risking 1% of my account in this trade.

30 comments

  1. PipPride

    Why give yourself extra an extra obstacle. To get to PT2 you need to break quite a strong support line, I would put PT2 on the support line, say at 148.25.
    Good luck with the trade.

    Reply
  2. Hucklekiwi PipHuck

    PipPride, that’s a very good point… My pt2 might be too far beyond the next support level. BPForex, I put my stop loss at 1.5100 because that price level is beyond this year’s high. It would allow my trade enough breathing room to avoid being stopped out by head fakes. Appreciate your feedback guys!

    Reply
  3. PipPride

    Why give yourself extra an extra obstacle. To get to PT2 you need to break quite a strong support line, I would put PT2 on the support line, say at 148.25.
    Good luck with the trade.

    Reply
  4. Hucklekiwi PipHuck

    PipPride, that’s a very good point… My pt2 might be too far beyond the next support level. BPForex, I put my stop loss at 1.5100 because that price level is beyond this year’s high. It would allow my trade enough breathing room to avoid being stopped out by head fakes. Appreciate your feedback guys!

    Reply
  5. RudolphTheGreat

    Rudolph: the euro in several hours 1.5190 after having some resistance it would continue to 1.5225 or 1.5223.
    MAKE MONEY AND HAVE FUN IT’S A GAME PLAY IT >>>
    contact me for any questions…

    Reply
  6. RudolphTheGreat

    Rudolph: the euro in several hours 1.5190 after having some resistance it would continue to 1.5225 or 1.5223.
    MAKE MONEY AND HAVE FUN IT’S A GAME PLAY IT >>>
    contact me for any questions…

    Reply
  7. PipPride

    These things happen. I think it was a decent trade idea, it just didn’t work out this time.
    Looking forward to following your blog.

    Reply
  8. PipPride

    These things happen. I think it was a decent trade idea, it just didn’t work out this time.
    Looking forward to following your blog.

    Reply
  9. RudolphTheGreat

    Don’t Be afraid from the volatility exchange rate instead it’s a buy opportunity I’m still on all my forecast 1.5225 euro/ dollar 79.85 dollar /yen Don’t Be afraid from the volatility but also dont’t be so leveraged…have fun and gain money…

    Reply
  10. RudolphTheGreat

    Don’t Be afraid from the volatility exchange rate instead it’s a buy opportunity I’m still on all my forecast 1.5225 euro/ dollar 79.85 dollar /yen Don’t Be afraid from the volatility but also dont’t be so leveraged…have fun and gain money…

    Reply
  11. Hucklekiwi PipHuck

    Hi RudolphTheGreat, thanks for the input! I’ll stick with my stop losses though, since I’m still new at this and I want to limit my losses in case my trade ideas are wrong. But I’m definitely learning a lot from you and I’m looking forward to your feedback for my upcoming trades!

    Reply
  12. Hucklekiwi PipHuck

    Hey snpfx, I’ll definitely keep you posted about my HLHB system. I’ll probably be able to come up with another update before this week ends. Thanks for reading my blog!

    Reply
  13. Hucklekiwi PipHuck

    Hi RudolphTheGreat, thanks for the input! I’ll stick with my stop losses though, since I’m still new at this and I want to limit my losses in case my trade ideas are wrong. But I’m definitely learning a lot from you and I’m looking forward to your feedback for my upcoming trades!

    Reply
  14. Hucklekiwi PipHuck

    Hey snpfx, I’ll definitely keep you posted about my HLHB system. I’ll probably be able to come up with another update before this week ends. Thanks for reading my blog!

    Reply
  15. mbras

    Huck, I read your explanation about the stop loss, anyways, as soon as a resistance is broken it acts like a resistance, right? So, why not take then the 10 pips above the spike on the 17th? Just my thoughts girl!! Best for you.

    Reply
  16. mbras

    Huck, I read your explanation about the stop loss, anyways, as soon as a resistance is broken it acts like a resistance, right? So, why not take then the 10 pips above the spike on the 17th? Just my thoughts girl!! Best for you.

    Reply

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