Joining the Short Euro Bandwagon – Open Orders Closed

Open Orders Closed: 2010-06-14 22:55

PoD Chart

Aww man! So much for waiting for a breakdown on that bearish flag… It broke to the upside instead! Towards the end of the week, when the EURUSD pair kept climbing, I kept thinking that I shouldn’t have adjusted my short entry from 1.2100 to 1.1865. But when the pair gapped up during the weekend and went on to climb higher, I realized that I probably would’ve gotten stopped out if I kept my original entry.

It does look like this pair could keep climbing higher. I mean, not even another sovereign debt downgrade to Greece was able to halt the EURUSD rally yesterday! Or maybe that’ll just give me an opportunity to short it at a better price, hmm…

So once again, I’m left with no trade! It’s been awhile since I’ve been triggered. Hopefully, I spot some nice entries this week!

Trade Adjustment: 2010-06-08 23:38

PoD Chart

Oh no! I took a look at Big Pippin’s chart art today and it does look like a bearish flag is forming on the EURUSD! I don’t want to miss this move, so I’m going to make an adjustment to my trade!

I read up a little bit on bearish flags, and I found out it is a bearish pattern. I’m looking to short on the break of the recent low, with my order set at 1.1865. Now, I’m going to do something a little differently with this trade if I get triggered. Once my order gets filled, I’m going to set an automatic trailing stop of 170 pips. This is equal to the daily average true range.

I’m pretty confident its going to keep falling, so I don’t have any particular take profit point in mind. I really think its headed for the 2005 lows near 1.1650!!!

Again, here’s my new trade plan:

Short EURUSD at 1.1865, trailing stop of 170 pips.

Trade Idea: 2010-06-07 03:52

PoD Chart

OMG! What happened to the euro last Friday?! I went off to work in the morning, so I could only check my charts later at night and skadoodle. Then what do I see? The EURUSD just hit 1.1900! I NEED to get into this trade!

I got a clue of what happened when these two Wall Street traders walked up and ordered a couple of cappuccinos. Okay fine, I’m not sure if they were from Wall Street, but they were in suits and started talking about the euro, so I assumed they were.

Anyway one of the dudes said that what helped trigger some of the euro selling were some comments made by the French Prime Minister, who said that parity with the dollar would be a good thing for the euro! The other trader also added that there are some concerns about Hungary’s deficit issues, even though they aren’t part of the euro zone. I guess things pretty much suck for the euro right now!

In any case, I’m posting up a trade now because I just can’t believe that I missed on that move. Like I said, I NEED to get in this short euro. It just looks like everyone’s souring on the euro like Jessica Simpson’s acting skills!

Of course, I can’t just jump into this trade blindly. I’ve got to make sure that I know what’s coming out this week. I’ve read Pip Diddy’s roundup today, and I don’t think that the upcoming German factory orders and industrial production figures will give the euro too much of a boost.

What I’m focused on is the ECB‘s rate decision later this week and any accompanying statements. I really wonder what Jean Claude Trichet will have to say about the euro, especially after that comment made by the French Prime Minister!

Aside from that, there aren’t much high impact reports coming out from the US this week before Friday, when retail sales data is due. I may have to adjust my trade before this report, as I don’t want to get hit with any strong moves to end the week. While retail sales data doesn’t rock the markets like the NFP report does, it could still serve as a catalyst a major move.

Technically, it looks like the EURUSD is starting to retrace some of its losses. I don’t know how far it will go but I plan to hop in the overall downtrend once price hits 1.2100. More than being a psychologically significant number, this price level nicely coincides with the 50% Fibonacci retracement level.

If I do get triggered, I will put my profit targets at former lows. Specifically, I will set my first profit target 1.1900, last week’s low, and place my second profit target at 1.1650, which was the EURUSD’s lowest level back in 2005. As for my stop, I will put it at 1.2200, just above the broken support level and the 61.8% Fibonacci retracement level.

By the way, in order to reduce risk, I will move my stop to breakeven once price falls 100 pips from my entry.

Here’s what I’m going to do:

Short EURUSD 1.2100, pt1 at 1.1900, pt2 at 1.1650, stop at 1.2200. I will risk 1% of my account.

Check out my posts on MeetPips.com!

  • Buckscoder

    Just my 2 cents:

    You assume the euro will retrace in the first thought. Then you are guessing of further downbreak. Why do you not trade on what you see and what your first thought is and instead hope and guess where it will go to and then turn around and then guess and hope where the targets are? I am a long term investor and I can tell you from pure experience that you can be at least a little more sure what is happening now and in the near future than what is going on in the far future.

    Take care.

  • PabloFrancesca

    Just my 2.5 cents

    You are trying to be careful, which is a good trait. Sure, it may not retrace to 1.21 (which is what I’m waiting for myself), but I think you have a sound idea. You might try balancing risks by entering now with a smaller position. Your risk will still be the same, (your reward will be reduced), but if it breaks far lower, at least you wont miss out. Also, if it cracks 1.21 you can check out the market reaction to that level and add to your position with the same stop if you feel the market has rejected that level. I’ve always thought your system was far too conservative, I think you can benefit from some candlestick analysis.

  • Buckscoder

    Just my 2 cents:

    You assume the euro will retrace in the first thought. Then you are guessing of further downbreak. Why do you not trade on what you see and what your first thought is and instead hope and guess where it will go to and then turn around and then guess and hope where the targets are? I am a long term investor and I can tell you from pure experience that you can be at least a little more sure what is happening now and in the near future than what is going on in the far future.

    Take care.

  • PabloFrancesca

    Just my 2.5 cents

    You are trying to be careful, which is a good trait. Sure, it may not retrace to 1.21 (which is what I’m waiting for myself), but I think you have a sound idea. You might try balancing risks by entering now with a smaller position. Your risk will still be the same, (your reward will be reduced), but if it breaks far lower, at least you wont miss out. Also, if it cracks 1.21 you can check out the market reaction to that level and add to your position with the same stop if you feel the market has rejected that level. I’ve always thought your system was far too conservative, I think you can benefit from some candlestick analysis.

  • DeDubb

    My 2.05 cents:

    Similar sentiments as Pablo.

    I see a bearish descending triangle on the 4 hour chart with it’s top edge following the current daily pivot around 1.1980. It is quite possible that it could break out to the downside (or upside) in the next session and you target of 1.2100 could be missed.

  • DeDubb

    My 2.05 cents:

    Similar sentiments as Pablo.

    I see a bearish descending triangle on the 4 hour chart with it’s top edge following the current daily pivot around 1.1980. It is quite possible that it could break out to the downside (or upside) in the next session and you target of 1.2100 could be missed.

  • Huck

    Thanks guys for the feedback. Yeah, candlestick analysis is good, though there is one problem… I have a day job! I can only do my analysis after work and set my orders then. I’d love to adjust my trade entries on the fly, but I can’t! :( I will be doing some adjustments on this trade today though, so stay tuned for that!

  • PAL1

    I trade with three brokers, with price feeds from three different sources. Result: a doji on one chart could be a hammer on the next because there is also a difference in time zones.
    Now I just ignore candlesticks and check for price movement on my other indicator(s). A bar on top of H Ashi works well.

  • Huck

    Thanks guys for the feedback. Yeah, candlestick analysis is good, though there is one problem… I have a day job! I can only do my analysis after work and set my orders then. I’d love to adjust my trade entries on the fly, but I can’t! :( I will be doing some adjustments on this trade today though, so stay tuned for that!

  • PAL1

    I trade with three brokers, with price feeds from three different sources. Result: a doji on one chart could be a hammer on the next because there is also a difference in time zones.
    Now I just ignore candlesticks and check for price movement on my other indicator(s). A bar on top of H Ashi works well.

  • Buckscoder

    LOL. The issue lies not in the fact it could not go to 1.21. The issue lies in the fact it could overshoot 1.22 and then hit the SL. Almost all guys now believe in a big downmove. That is a warning sign, isn’t it? Yeah, I saw this flag this morning on H4, too. But a flag for itself without any confirmation does say what? Nothing!

    It is very risky these days to trade in the eurusd. The downward movement loses steam, which is always if it was going too steep and too fast. So, watch out for ranges!

  • matant

    The Euro will bounce back pretty soon IMO. I don’t see the EURUSD even hitting 1.1. If I’m wrong we’re heading towards a Dollar world…

  • Buckscoder

    LOL. The issue lies not in the fact it could not go to 1.21. The issue lies in the fact it could overshoot 1.22 and then hit the SL. Almost all guys now believe in a big downmove. That is a warning sign, isn’t it? Yeah, I saw this flag this morning on H4, too. But a flag for itself without any confirmation does say what? Nothing!

    It is very risky these days to trade in the eurusd. The downward movement loses steam, which is always if it was going too steep and too fast. So, watch out for ranges!

  • matant

    The Euro will bounce back pretty soon IMO. I don’t see the EURUSD even hitting 1.1. If I’m wrong we’re heading towards a Dollar world…

  • theinvisibleman

    About the french prime minister’s statement:
    medias have mistaken what he meant by ‘parity’ which in french does not mean necessarily a 1 to 1 ratio. He just
    said it is fine with the actual parity (around 1.20)… politics are not traders !

  • theinvisibleman

    About the french prime minister’s statement:
    medias have mistaken what he meant by ‘parity’ which in french does not mean necessarily a 1 to 1 ratio. He just
    said it is fine with the actual parity (around 1.20)… politics are not traders !