Short EUR/USD Closed – Trade Review

We got a big surprise from the Eurozone today, which traders took as a signal to buy up euros like crazy today!  This took EUR/USD to my stop level at breakeven and out of my trade.  Here’s a quick review.

Original trade idea: Long-term Short on EUR/USD?

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.

EUR/USD 4 hour forex chart review

EUR/USD 4 hour forex chart review

My main man Pip Diddy reported earlier today that Eurozone PMI’s surprised big time to the upside, showing that manufacturing rose to its highest levels in over 2 1/2 years.  This brought back bullish sentiment in the euro, or at the very least, signaled euro bears like myself to lighten up on short positions.

I waited to see what the market would do at 1.3600, and when that easily broke, my next decision was that from there, I can lock in around 50 pips by closing early or let it ride with the possibility sellers my scale back in and reversal the move.  Since either way, I already had a risk-free trade when I move my stop to breakeven, I decided to let it ride and try to go for more pips.

Unfortunately for my trade, it looks like the euro was squeezed higher, going beyond my stop level (currently trading around 1.3678) and taking me out at break even: 1.3650.

Total: 0 pips

In hindsight, I think I should have gotten out much sooner with such bullish news, but since I was going for a longer-term trade based on monetary policy, I don’t regret how I played it; it’s just never fun to see a gain–no matter how small–go away because of one event.  On the other hand I’m glad to get out of this trade because with the Eurozone thankfully looking much brighter, I’m not interested in playing two improving economies against each other.  I think there are way better opportunities to better focus on like my GBP/CAD long trade.

So, that’s it on EUR/USD for now, but I’ll continue to watch it to see what it does at 1.3700 and 1.3800.  For you euro bulls out there, you might want to check out my homegirl Huck’s trade idea to go long on it!


  • ForExchange

    Hi Pipcrawler!

    I do not understand some of the things you wrote: “it’s just never fun to see a gain–no matter how small–go away because of one event.” And why is that then? I mean in the news and projections the last time it was always that the EUR will strengthen. I took my win about a day ago. I rather take a little profit than going vs. the trend and most likely losing everything. My 42 pips was way better than nothing.

    You also write: “For you euro bulls out there, you might want to check out my homegirl Huck’s trade idea to go long on it!” It seems like you consider yourself as a bearish trader only on this currency, but at the end what matters is only the pips! I mean you also see the trend, I made a market entry too because I am also convinced that trend changed.

    Our plan did not work out the way we wanted, but I still took some profit and now I make profit to the other direction. That is trading.

    Do not get me wrong, I always follow your articles and learn a lot from them. I just thought I give also my thought now on your trade because I did not understand everything in it.

    Best wishes and until your next trade idea!

    • Ken

      Pointless to try to correct pipcrawler on his thinking of this pair regarding the directional bias! He is dead set on selling no matter what the market condition is! Don’t believe me? just check his past years trade on the pair. His plan is just sell and sell, no matter what the market shows and he never ever think he is wrong in his analysis .

      • Pipcrawler

        Hey Ken, I mainly play the fundamental picture and at times that’s a good decision and at other times its not a good decision. The question is whether or not I’m consistent in playing all legitimate opportunities using that framework…and I have not. Look back over the past 5 years on EUR/USD and you’ll see a lot of down moves (EUR/USD is still well below its highs around 1.60 in 2008), but I was not good at catching them for whatever reason (poor timing, volatility, focus on other pairs or tasks for, my newbieness, etc.). It’s true that my record hasn’t been good compared to what I benchmark my performance to (Barclayhedge currency index), but I don’t just look at the bottom line number because it doesn’t show how I’m still learning, growing, improving and putting more effort to stay focused. I’m a slow learner, but I’ll get there 🙂

    • Pipcrawler

      Hey ForExchange! Remember, my framework for this trade is long-term divergence in monetary policy. I wasn’t looking to take profits on just 100 pips, I was planning on holding this for a while (weeks/months) if the the market continued my way for hundreds of pips. Trading in this way will result in more losses than wins, but those wins should be pretty big and make up for the small losses.