Pick of the Day: EUR/USD – Trade Closed

Trade Closed: 2007-08-01 09:50

We started August with a small profit as the Greenback continued to rally against the Euro throughout the Asian/Euro trading session.

From the entry point at 1.3660, the pair gradually made its way to our first profit target. Half our trade was closed to lock in profit at 1.3640, and the stop on the remaining position moved to breakeven.

The pair found support at 1.3640 and rallied from that point, stopping out the remainder of our position at breakeven.

1st half: +20 pips
2nd half: +00 pips
Total: +20 pips

Trade Idea: 2007-07-31 23:28

PoD Chart

Good evening! It’s a new month and hopefully we can get it started off right! Tonight, we will take a look at EUR/USD and hopefully gain from its current downtrend.

As we can see on the chart, we have consecutive lower highs and lower lows. Also, it looks like stochastics are turning lower – another indication of the trend resuming. We will look to jump in to the downtrend at the current market price (1.3660) with our stop above the major price level of 1.37.

We do have event risk tomorrow with ISM Manufacturing data, but with current market players in risk aversion and profit taking mode, US data would have to be pretty bad to change the sentiment.

Short EUR/USD at market (1.3660), stop at 1.3710, pt1 at 1.3640, pt2 at 1.3610

Please remember to never risk more than 1% of your account on any single trade. Adjust position sizing accordingly.

Good luck and good trading!

  • bpope

    Do you not use a minimum of a 1:1.5-2 Risk/Reward ratio? I’m newer to the day trading area, so maybe these rules of thumb don’t apply when attempting to ride the momentum?? I know I use it when I swing trade, but I am just curious?

  • bpope

    Do you not use a minimum of a 1:1.5-2 Risk/Reward ratio? I’m newer to the day trading area, so maybe these rules of thumb don’t apply when attempting to ride the momentum?? I know I use it when I swing trade, but I am just curious?

  • Pipcrawler

    Based on the price action of the pair (downward momentum), I felt that we had a high probability of hitting the targets within a day or so time frame. I also felt that the logical resistance area and stop would be above 1.37. I suppose this created a risk-to-reward ratio that was not favorable by “textbook” standards, but I felt the probability of profitability was worth the risk.

  • Pipcrawler

    Based on the price action of the pair (downward momentum), I felt that we had a high probability of hitting the targets within a day or so time frame. I also felt that the logical resistance area and stop would be above 1.37. I suppose this created a risk-to-reward ratio that was not favorable by “textbook” standards, but I felt the probability of profitability was worth the risk.