Trade Closed: 2011-4-10 23:43
I was right! My pips did come! This puts my total account balance 2.88% up year-to-date. I’m so happy!
As promised in my first post, I bought the pair at 1.4290 when a bullish divergence had materialized and when I noticed that support at the 38.2% Fib was holding. From there, it didn’t take long for my trade to hit my profit target. I went to the salon to get my hair rebonded and when I came back, voila! Profit target hit!
Closed at 1.4400 for +110 pips / +0.60%
I could have gotten more if I was a bit faster though. I should’ve have entered when the pair dipped below the 50% Fib while ECB President Jean-Claude Trichet was still speaking. Drats!
Also, I could’ve been more aggressive with my trade. I only risked 0.5% because I thought it would be safer to wait for the pair to drop further down to the 61.8% Fib level before risking the other half of my usual position. The School of Pipsology calles that strategy “Scaling.”
But then again, a win is a win, right? Overall, I’m happy with how my trade worked out. I hope y’all were able to reel in some pips on it too. Give me a holler on Twitter, Facebook, or in my comment box below if you did!
Trade Idea: 2011-4-7 1:54
Isn’t there a line that goes something like, “Someday your pips will come?” Well, I think today is that day for me! Take a look at this potential Fib play on EUR/USD!
I immediately fell in love with this setup as soon I saw it on Big Pippin’s Daily Chart Art.
I zoomed in on the 1-hour time frame, and it looks like the euro is losing its momentum having been rejected at the minor psychological handle (1.4350). But since I’ve learned (the hard way!) why they say “The trend is your friend,” I’m see this as an opportunity to buy the euro at a much, much cheaper price!
So yeah, I think what we’re seeing now is nothing more than just a retracement. I’ll wait for the pair to test support at the previous week high and probably pull the trigger if bullish candlesticks materialize around the 50% and 61.8% Fibonacci retracement levels.
The fundamentals also agree with me. For one thing, inflation in the region has gone waaaaaaaaaaaaay above the European Central Bank’s mandate of 2.0%. The most recent consumer price index reported a 2.6% inflation rate! Traders are saying that the ECB will most probably hike rates in their next meeting. Interest rate hikes are usually bullish for the domestic currency.
Meanwhile, in the U.S., risk appetite seems to be picking up due to a VERY POSITIVE non-farm payrolls report last Friday. According to the forex calendar, the NFP showed that 216K jobs were created in March, much higher than the 190K initially expected. The unemployment rate also ticked down to 8.8% from 8.9%!
So there you have it folks! I’m going to buy the pair based on technicals and fundamentals. Now I’m just waiting for a pull back around the 50%-61.8% Fib levels and bullish reversal candlesticks materialize before entering. If reversal candlesticks do not appear, then I WILL NOT ENTER! I need that confirmation!