EURUSD: Overbought? – Trade Closed

Trade Closed: 2010-10-12 22:27

EUR/USD 4-hour Chart

You win some, you lose some! As you all probably know by now, the FOMC minutes did NOT help my trade and was even detrimental…

The minutes revealed that the Fed will take appropriate action soon (that’s quantitative easing!) and provide additional accommodation if needed. This sent traders scurrying away from the dollar.

I’m not feeling bummed out at all. I’ve had my fair share of winning trades recently, and I know the losing is part of the game. Hopefully, my next trade will be a winner!

Trade Idea: 2010-10-12 3:19

EUR/USD 4-hour chart

Hey y’all! Did you miss lil’ ol’ me? I was in the salon getting my hair and nails done for a date later when I saw Big Pippin‘s Chart Art on my phone. Right then, I knew two things are gonna happen today!

First is that I’m gonna wow my date with my new, sexy layered hairstyle. And second, I’m going to sell EUR/USD.

Just look at those double top and the pair breaking below support at the bottom of the ascending channel! I’m thinking of playing the break by entering below the neckline, where the pair seems to be chilling out now, at 1.3815.

I have a feeling that EUR/USD may still go for another hustle with stochastic indicating that it’s oversold. I don’t wanna break any of my French-tipped nails stressing about being caught in a bull run by playing the bounce.

I’m keeping my fingers crossed that the minutes of the most recent FOMC meeting will reel me in some pips.

Don’t get me wrong. I’m not exactly optimistic about the US economy. I just think that maybe the report will show that the Fed’s decision on launching QE2 still isn’t set in stone.

I mean it was just yesterday that we heard Kansas Fed Reserve President Thomas Hoenig and Vice Chairman of the Federal Reserve Board of Governors Janet Yellen talk about how further stimulus could be bad for the economy too.

Who knows? They could have convinced a few more members of the FOMC to side with them that quantitative easing ain’t the way to go. Or at least not yet.

Anyway, I plan on taking profit at 1.3650, where EUR/USD has previously found support. I used a volatility stop for my stop loss. Since the pair’s average true range for the day is equal to 140 pips, I placed my stop loss order at 1.3955.

Short EUR/USD 1.3815, pt at 1.3650, sl at 1.3955.

Wish me luck (on both my trade and my date)! Oh, and don’t forget to follow me on Meetpips.com!

  • gh0stJPY

    yup am going SHORT on EUR\USD & GBP/USD, lets see how it goes!

  • gh0stJPY

    yup am going SHORT on EUR\USD & GBP/USD, lets see how it goes!

  • gh0stJPY

    oops my SHORT STOPS have been triggered and has locked in my gains (142 pips), now its heading up (LONG) lol!

  • gh0stJPY

    oops my SHORT STOPS have been triggered and has locked in my gains (142 pips), now its heading up (LONG) lol!

  • sunglow

    Hi Huck. It looks like a good trade, but you might have executed it a bit early. It might have been better to wait a while to see which way the wind is blowing. Good luck anyway.

  • ryantc

    just SHORT it, wait and see

  • sunglow

    Hi Huck. It looks like a good trade, but you might have executed it a bit early. It might have been better to wait a while to see which way the wind is blowing. Good luck anyway.

  • ryantc

    just SHORT it, wait and see

  • rhpmike

    Stop at 1.4000ish and you’re good. Why the stop at 1.3955??

  • Buckscoder

    Well, my indis did show me a bearish bias, too. But there were several questions. The reason for the stop at this level was in question for me. Plus the lingering question, why not use limit orders in that case of predictions. I would not trade on predictions, but I find stop orders and predictions like fire and water. Lets say the entry would have been at 13950 and the stop loss at 14030. That way the trade had several improvements:

    1. Rather conservative entry. No hit no loss.
    2. Slightly lesser risk

    Plus after all I ask myself what would be the reason to trade on predictions, if you have a successful system. I learned it my way that prediction trading will not work. At least not for me. You fail via statistics. While a system takes you in the front seat BECAUSE of statistics.

    It’s nice to have a lucky trade every now and then, but I guess without any system over the long run it will be all gone one day in the future.

    Good luck for your next trade!

  • rhpmike

    Stop at 1.4000ish and you’re good. Why the stop at 1.3955??

  • Buckscoder

    Well, my indis did show me a bearish bias, too. But there were several questions. The reason for the stop at this level was in question for me. Plus the lingering question, why not use limit orders in that case of predictions. I would not trade on predictions, but I find stop orders and predictions like fire and water. Lets say the entry would have been at 13950 and the stop loss at 14030. That way the trade had several improvements:

    1. Rather conservative entry. No hit no loss.
    2. Slightly lesser risk

    Plus after all I ask myself what would be the reason to trade on predictions, if you have a successful system. I learned it my way that prediction trading will not work. At least not for me. You fail via statistics. While a system takes you in the front seat BECAUSE of statistics.

    It’s nice to have a lucky trade every now and then, but I guess without any system over the long run it will be all gone one day in the future.

    Good luck for your next trade!

  • sunglow

    Good observations by Buckscoder

  • sunglow

    Good observations by Buckscoder

  • Newlifebeat

    Somone help me hw do i start training.

  • Newlifebeat

    Somone help me hw do i start training.

  • Huck

    Yeah, nice one Bucks. Hopefully I can come up with as good analysis as you on my next one!

  • Huck

    Yeah, nice one Bucks. Hopefully I can come up with as good analysis as you on my next one!