Trade Canceled: 2010-11-30 1:33
Even though I got the direction right, it didn’t matter… because I wasn’t in the trade! Apparently, the bears were too eager to sell the pair that they didn’t even let it retrace a bit!
Ahhh, risk aversion really is too strong, making it difficult for me to “sell high” and get a good price on the pair. Still, I think my trade idea was pretty and rationalization was pretty solid… Better luck next time, Huck! (That’s me being weird talking to myself.)
Trade Idea: 2010-11-24 2:22
But before going into my trade idea, let me just confess something.
Guys, I still feel a little heartbroken from my most recent loss. Trading is really rough sometimes, which makes me think that I just won’t be any good. Do you have any advice on how to cope with losses? Ice cream? Dates? Get that new special edition Pink Friday MAC lipstick?!?
Sigh. In any case, I don’t think any good will come out of being all emotional on you guys. I better get right to my trade idea before I bore ya’ll to sleep.
For this week, going long dollar (or yen) seems to be the best trades to take as the fundamental environment is just filled things to get scared off!
For one, there’s the possibility of a debt contagion from Ireland (boo! Not again!). Secondly, the tensions between the two Koreas could escalate into a full-blown war. And thirdly, there are a couple of important economic reports coming out that could trigger another round of risk aversion.
Looking at price action charts, I noticed that GBP/USD already broke down below a major trend line. However, with Stochastic indicating that the pair is already oversold, I think we may see a soft bounce. That being said, I’m going to wait for price to retrace somewhere around the intersection of the 61.8% Fibonacci retracement level and the top of the descending channel before pulling the trigger.
Of course, what’s a trade idea without stops? For my stop loss, I set it a little bit above this week’s highs at 1.6100. If price reaches this level, GBP/USD will have already broken above the channel, invalidating my trade idea.
I’ll be aiming for the 1.5800 psychological handle as my first profit target. But ultimately, I’m keeping my fingers crossed for the pair to go blazin’ all the way down to previous support at 1.5650.
Short GBP/USD 1.5950, pt1 at 1.5800, pt2 at 1.5650, sl at 1.6100. As usual, I will go with my 1% risk.