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Trade Review: 2011-04-26 22:20

During the European trading session, the euro rallied against the majors on a strong Spanish bond auction, pushing EUR/JPY up to my short orders at 119.50 and higher.

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

Unfortunately, that was pretty much it for the day as the pair stayed rangebound through the remainder of Tuesday’s trading session. So, I decided that was it for my day trade and that it was time to look for a new opportunity so I manually closed at 119.70.

Total: -20 pips/ -0.25% loss

In retrospect, the I could have been more conservative with my entry by waiting for EUR/JPY to test the top DATR/PDH area (119.80 – 120.00). I don’t really feel any regret about my entry because I saw strength as it went lower and went aggressive with that.

So, tiny loss to start off the week, but I already have a trade idea in the works for today’s UK preliminary Q1 GDP report. Stay tuned for that on my Twitter and Facebook pages! EUR/JPY Forums
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Trade Idea: 2011-04-26 4:14 ET

Good morning Forex friends! For my “Pick of the Day,” I have an intraday short idea on EUR/JPY. This is based mostly on technicals, with a splash of risk sentiment throw in on the side…check it!


On the 15m chart above, we can see EUR/JPY has been in a downtrend since topping out at 120.00 on Monday. After breaking yesterday’s lows, the pair has bounce higher to retest PDL, as well as 61% Fib level and WO. Finally, stochastics are showing overbought conditions, signaling the bounce higher may be running out of steam.

After a strong run up in risk taking, it looks like traders are ready to take profit this week, especially ahead of major events like UK and US preliminary data, Aussie CPI, and the big event of the week, the FOMC interest rate decision (Be sure to check out the Forex calendar for release times). It makes sense to take some off the table ahead of events that could wipe out your profits very quickly.

So, I look to do an intraday short on EUR/JPY, but not until it reaches the MiPs level of 119.50. My stop will be 80 pips (half daily ATR) and above the PWH (120.40), and my profit target will be just below the next MaPs level of 118.00. Here’s what I am going to do:

Short EUR/JPY at 119.50, stop at 120.40, pt at 117.90

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

Stay tuned for updates and adjustments on my Twitter and Facebook pages. Thanks for checking out my blog!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.