After rolling my stops to reduce my risk on EUR/USD, the bears managed to keep control and roll the market lower. Time for another adjustment to not only lock in a little profit but maximize my profit potential in case the pair continues to move lower.
Support Break on EUR/USD?
At the beginning of September, I rolled down my stops on my EUR/USD short position to reduce my risk ahead of potential weak U.S. economic data. I look to do so once again as we head into the end of the month and ahead of a fresh set of data, including another round of U.S. business sentiment and employment data next week.
Fortunately, the pair took another spill lower this week, making my job easier in that I can actually lock in a small profit this time and leave enough room for a little bit of volatility to play out until next week.
I’ve decided to also maximize my potential gain by adding another position if the pair moves lower, while of course rolling my stops even further as well. Here’s what I’m doing:
Rolled stop from 1.1115 to 1.1075, locking in a small 0.10% gain.
Added an addition short order on EUR/USD at 1.0920 with stop at 1.1025 and 0.10% risk. If triggered, moving all stops to 1.1025 and max target for full position at 1.0500.
This adjustment gives me a bigger position at an average price of about 1.1062 and with a 1.1025 stop, keeps my max risk at a 0.11% gain. This also gives me roughly two daily ATR of breathing room and increases my max potential gain to 1.80% on 0.66% original risk at my max target (or 2.72:1 return-on-risk). If the market bounces from here without triggering my new short order to hit my stop, I still walk away with a small gain of about 0.10%. Not a bad trade to have on right?
Well, that’s it for now as there is nothing to do but wait for the upcoming data and geopolitical landscape to dictate the next moves for EUR/USD. I’ll likely make further adjustments next week when the aforementioned business sentiment and U.S. jobs data hit the market.
But what do you think of the latest adjustments? Good moves or should I have closed a bit (or all) of the position down? Would love to hear your thoughts so please don’t hesitate to share in the comments section below!
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