Pick of the Day: EUR/USD – Trade Closed

Trade Closed: 2009-07-20 15:38

Well, the bullish momentum for more risk taking has continued as US earnings have surprised to the upside. Resistance at 1.4000 and 1.4100 have failed to hold and the pair made its way up to 1.4200 where I was stopped out.

Total: -200 pips/ -1.0% loss

So, after all that waiting, I took a small hit of just 1.0% – not so bad. What’s more frustrating is how the market continues to move higher on “positive” earnings reports in the US and low cost credit. There’s no fundamental bias for these moves as the job market is still down, foreclosures are still up, and companies are posting positive earnings despite falling revenues. Is the recession over? We’ll see, but for now the market is always right and I may have to just go with this new trend higher. Stay tuned and good luck!

BabyPips.com EURUSD Forums
Setting Newbie Expectations
My Favorite Trading Books
BabyPips.com Forex Chatroom

Trade Idea: 2009-07-13 19:47

PoD Chart

Good evening! There’s a potential short term, swing trade setup forming in EURUSD. We’ve seen a bit of retracement from last week’s risk aversion moves. Is it time for the trend lower to continue?

I have the one hour chart up top, and I highlighted the channeling price action the pair is currently in. Stochastics are indicating overbought conditions as the pair nears the top falling trendline. One other variable to take note of is that this area is around 1.4000 – a psychologically significant price level. There may be a lot of traders and institutions watching, and possibly ready to take action around that price level.

Will sellers rule once again? Are markets going to revert back to risk aversion? There is a potential for that sentiment to return, and the Euro bears may get a boost if we see weak data from the eurozone on today’s calendar. We also have some US data in the pipeline, most notably the Retail Sales and Producer Price Index data. I think the retail sales data will have the biggest impact on risk sentiment as it indicates how consumers are doing during this recession.

So, I have decided to short the pair at the top of the channel. My stop will be above last week’s high, around .14175, and I will target the area between the previous week low and bottom of the channel. Here’s what I am going to do:

Short EURUSD at 1.4000, stop at 1.4200, pt at 1.3800

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

Stay tuned, good luck and good trading!

  • egeis

    Thanks a lot. I think you made a mistake and instead writing stop 1.4100 you put the value of 1.4200 as a stoploss to your eurusd position.

  • Pipcrawler

    Hey egeis, 1.4200 is the correct stop loss. thanks for checking out my blog!

  • gulzaar

    i have been following your blog for a while, and was wondering that since most of your trades have a 1:1 risk-reward ratio, wouldn’t you theoretically break-even in the long run as opposed to profiting? thanks

  • Pipcrawler

    Hey egeis, 1.4200 is the correct stop loss. thanks for checking out my blog!

  • jeantradestoo

    Pipcrawler I just joined babypips blog and I just opened my first live account with Ac-markets. I check my forex economical events at their alerts section can you tell me another option that you check? Thanks!

  • gsbpipster

    Inability to sell off from 1.4 today looks weak..EUR looking bullish to me

  • jeantradestoo

    Pipcrawler I just joined babypips blog and I just opened my first live account with Ac-markets. I check my forex economical events at their alerts section can you tell me another option that you check? Thanks!

  • gsbpipster

    Inability to sell off from 1.4 today looks weak..EUR looking bullish to me

  • JohnStarlo

    I think the trade idea is good, If you move your stops when the trade starts to gain then the ratio change. Personally I would would not risk 200 pips, I would enter at 1.4125, risk 75 pips. I still think that 1.4200 holds.

  • JohnStarlo

    I think the trade idea is good, If you move your stops when the trade starts to gain then the ratio change. Personally I would would not risk 200 pips, I would enter at 1.4125, risk 75 pips. I still think that 1.4200 holds.

  • Pipcrawler

    What’s up! Thanks for the comments everyone! I’m still hanging in this trade because of technicals and fundies, but we’ll just have to see if investor sentiment lines up. Jeantradestoo – you can check out calendar for upcoming events: /tools/forex-calendar/

  • Pipcrawler

    What’s up! Thanks for the comments everyone! I’m still hanging in this trade because of technicals and fundies, but we’ll just have to see if investor sentiment lines up. Jeantradestoo – you can check out calendar for upcoming events: http://www.babypips.com/tools/forex-calendar/

  • gsbpipster

    Youll probably have a chance to get out of this trade at breakeven on a pullback this week–I would take that. Im still bullish on EUR, but at a minimum there is enough uncertainty in market direction to get out of the trade and wait for more clarity.

    The weekly chart looks like a flag formation, suggesting continuation of the bullish trend.

  • gsbpipster

    Youll probably have a chance to get out of this trade at breakeven on a pullback this week–I would take that. Im still bullish on EUR, but at a minimum there is enough uncertainty in market direction to get out of the trade and wait for more clarity.

    The weekly chart looks like a flag formation, suggesting continuation of the bullish trend.

  • barrooo

    I think I might start using Babypips as a contrarian indicator ;-)

  • barrooo

    I think I might start using Babypips as a contrarian indicator ;-)

  • Pipcrawler

    Thanks for checking out my blog and for the comments! Yeah, I got beat up on surprise positive earnings in the US markets… I thought we would see weak data. I was wrong, but that’s why I have stops!

  • Pipcrawler

    Thanks for checking out my blog and for the comments! Yeah, I got beat up on surprise positive earnings in the US markets… I thought we would see weak data. I was wrong, but that’s why I have stops!

  • jeantradestoo

    Thanks a lot, JohnStarlo!! I’m new at babypips and that is why I still don’t know all it features, but I will definitely investigate the whole site since it has sooo many good reviews!! ACMs calendar (I mentioned above) has alerts send to the email… does babypips have them too? Thanks again!!!!

  • jeantradestoo

    Thanks a lot, JohnStarlo!! I’m new at babypips and that is why I still don’t know all it features, but I will definitely investigate the whole site since it has sooo many good reviews!! ACMs calendar (I mentioned above) has alerts send to the email… does babypips have them too? Thanks again!!!!

  • natasyagorbacov

    hallo sir am natasya gorbacov did u have a yahoo messenger id

    nice to meet you ….sir

  • natasyagorbacov

    ups sorry sir this is my id yahoo messenger is it very important for me …id my ym is natasyagorbacov@yahoo.com please send me email or my ym okay…nice to meet u ..u r really truly master sir heheh…

  • natasyagorbacov

    hallo sir am natasya gorbacov did u have a yahoo messenger id

    nice to meet you ….sir

  • natasyagorbacov

    ups sorry sir this is my id yahoo messenger is it very important for me …id my ym is natasyagorbacov@yahoo.com please send me email or my ym okay…nice to meet u ..u r really truly master sir heheh…