Trade Closed: 2010-05-06 22:56
Lesson learned. When risk aversion’s too strong, don’t bet on the EURUSD to retrace as far as the 61.8% Fibonacci retracement level. I completely missed the boat on this one, as the pair hastily fell when the European trading session opened up.
In hindsight, I think the better decision was to play the break of the previous day low. The pair was strongly trending at the time and there weren’t really any signs of it retracing. Better luck next time, Huck!
Trade Idea: 2010-05-05 23:23
Here goes another edition of “How Low Will Euro Go?!?” And tonight’s main performer is… Hucklekiwi Pip! Give her a round of applause ladies and gentlemen! *Clapping*
I’ve always wanted to be a hotshot trader analyst but I guess those dreams will have to wait now. I mean, I’ve got you guys, right? Hah!
Moving on to more serious things, have you heard about all the riots all over Greece? Apparently, the rallies all over Greece have turned pretty violent and things are looking pretty bleak over there.
Once again, the news triggered widespread risk aversion, causing the EURUSD to drop to the 1.2800 handle! I suspect we’ll be seeing more of this in the coming days so I’m looking for ways to short the pair.
Since the start of the week the EURUSD has been taking ridiculously sharp dives and while I’m very tempted to just dive in and ride the strong downtrend, it might be better to wait for a pullback. After all, sellers gotta pause to catch their breath sometime, right?
I popped open the 4-hour chart and noticed that the previous week low lines up between the 50% and 61.8 Fibonacci retracement levels. It also coincides closely with the psychological 1.3100 handle, so I set my short entry there. Since price recently consolidated around the 1.2800 area, I placed my first profit target there. I had to check a longer-term time frame for the next support level in sight, and saw that there’s nothing in sight until 2009’s low just above 1.2500! I’m going for the big prize on this trade!
Here’s what I’m gonna do:
Short EURUSD at 1.3100, pt1 at 1.2800, pt2 at 1.2500, stop at 1.3250.
Actually, the EURUSD actually reminds me of the Limbo – just how low can it go?!
I’m crossing my fingers that this works out just as well as my recent EURUSD short trade. Wait, you haven’t seen it yet? It was my best trade yet! Hopefully luck is still on my side and I catch another break on this trade. Check it out at MeetPips.com!