About Pick of the Day

Each day, I will try to find what I believe is the best looking short term trade setup for the upcoming trading day or week. 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. I will post my ideas and/or reviews through out each session right here, on Twitter and on Facebook.

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February 2006

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Pick of the Day: NZD/USD

Posted 20:16 23 February 2006 | Comments

Today's pick is a basic play. We have the NZDUSD downtrending. It's a chart we've all seen plenty of times. Sometimes there's a break to the upside to the 200 SMA then reversal, but this time I think it will go down from the 100 SMA. So with a break of the pivot and 50 SMA, I will go short for 10 pips. My stop will be 10 - 20 pips above the pivot point. My aggressive target will be the S1 line.

A possible long play is a break and candle close above the R2 line. Going for 10 pips or until it hits the 200 SMA. Set stop 10 - 20 pips below the R2 line.

A quick return to my stop loss rule...always set your stop so that it is not more than 3% - 5% of your account. In this case if it's 10 pips above the pivot point then set it there. If you can do 20 pips, set it at 20 pips above stop.