About Pick of the Day

Pick of the Day Author

At the end of each trading day, I will find what I believe is the best looking short term trade setup for the upcoming trading day. If you're a forex newbie, it can be tricky in the beginning trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology of price movements so you can learn to analyze your own charts and trade on your very own. Trades will be posted by 1 am ET, Monday through Thursday evening.

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Pick of the Day: EUR/USD

Posted 10:25 04 March 2009 | 18

PoD Chart

Greetings All! Here's a quick day trade that I took as EUR/USD rallies in a downtrend on the hourly chart. Take a look!

This trade happened kind of fast as I opened up my charts about 15 or 20 minutes ago and saw EUR/USD popping higher and finding resistance just below the 61% Fibonacci retracement level drawn on the chart. Stochastics were also indicating overbought levels.

Here's the trade i took:

Short EUR/USD at market (1.2576), stop at 1.2640, pt1 at 1.2510, pt2 at 1.2450

Remember to never risk more than 1% of a trading account on any single trade.

I am still short bias on the pair, especially as the Eurozone starts to come center stage. Recent risk tolerance growth on the China stimulus spending and possibly US President Obama's announcement of "time to buy stocks," but I think focus on this bit of news will be short lived and traders will return to the global economic recession at hand.

So, I will continue to hold my trade for now, and for those whose analysis has led them to the same trade direction, it may be prudent to let volatility take the market back to high levels and better prices to jump in short.

A couple of significant events coming up, most importantly the interest rate decision from the ECB. Speculation is that they will cut to 1.5%. We'll see. Stay tuned for updates and adjustments and be very cautious in these choppy markets!

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Comments (18)

Hi PipCrawler, I think it would be better to use the Slow Stockhastic as a timing indicator. I would use the Fibonacci as a heads up of a possible trade. I would short when I see the stockhastic out of the oversold line that way most of the probabilities are on your side. Just my two cents on maybe a little improvement.
PoundPip | Posted 12:06 04 March 2009
In at 1.2601
PipWolf | Posted 12:09 04 March 2009
in at 1.2631 although now technically this trade has stopped out... still good to be in anyone ???
julian | Posted 12:43 04 March 2009
almost hit SL
Ben920FX | Posted 12:43 04 March 2009
i was long, but after making a quick buck i decided to follow your advice and short the pair, wish me luck....
suprkik | Posted 13:16 04 March 2009
forget my last comment, it has not stopped out..sorry my mistake
julian | Posted 13:33 04 March 2009
where`s engin when you need him ! he usually has some good theorys
julian | Posted 13:48 04 March 2009
hi there actually i am at long @1.2460. to get short wait 1.3000 or higher i dont know yet wait and see!
engin | Posted 14:21 04 March 2009
Didn't even have chance to look at this trade before your stop was hit. Unless NFPs is an lot worse than expected I'll think we'll see a multi day rally cause chances are the rate cut will be as expected. Trichet doesn't like to rock the boat
barrooo | Posted 14:31 04 March 2009
Nothing in the price action was/is suggesting going short now. Indeed S/L has been hit on my platform as well. I don't want to sound pretentiously critical but to me this was like a quick gunshot type trade (short time frame, not mentiong inverted hammer on previous daily close suggesting some bullish momentum). Sorry Pipcrawler for it.
pakiestra | Posted 14:44 04 March 2009
Thanks for the comments everyone and I even appreciate the criticism! :) I'm a student of trading just like everyone here. I have been for 10 years, and 20 years from now I'll still say that I'm a "student of the game". Always learning and always ready to take criticism. This was a good looking trade to me as action was trending lower on the 4 hour and 1 hour. My biggest mistake in my opinion is that I jumped in a bit early. I made a bet and lost, and that's how it is. I'm glad to see the comments as it shows people are learning and coming up with their own ideas... that is awesome! It makes me look forward to exchanging ideas with you everyday, and I am very thankful for that.
Pipcrawler | Posted 17:44 04 March 2009
Wise and Humble words. . . Good to hear.
julian | Posted 21:19 04 March 2009
its dropping now, is this plan still going?
EDay | Posted 22:04 04 March 2009
indeed wise and humble words.. i'm a student of the market myself however unlike pipcrawler who is passing with great results. I'm failing with a big F.. so here is to learning and sharing great ideas. Many thanks to all baby pips members who has taken time out to write, create and update their blogs to help myself and many other new traders.
TuanNgo | Posted 01:42 05 March 2009
good point pakiestra thats what i say actually dont look 30 min 60 min levels look daily even weekly charts they are more important buy 1.2460 or 12330 by the way target 1.48...
engin | Posted 07:12 05 March 2009
why this post is not closed?
aokmanga | Posted 17:04 08 March 2009
maybe it still going or fail.
EDay | Posted 04:37 10 March 2009
Good morning Mr. Crawler I was curious is this trade still active or hae you closed it out? Thank you for your input.
TREX | Posted 08:57 16 March 2009

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