Close Open Orders: 2009-09-01 16:50
Good afternoon! It looks like I didn’t enough of a rally in EURUSD to trigger my short orders at 1.4400 before the pair dropped at the beginning of the European trading session. With the end of the US session closed and the pair trading just above 1.4200, I have decided to close my open orders and look for opportunities elsewhere.
Closed open orders to short EURUSD at 1.4400. No trade.
So, another attempt to get in at a better price caused me to miss a nice 200 pip move today. That’s the way it goes sometimes and we just have to keep learning, adjusting, and plugging away.
I still like this pair short as we are now seeing risk aversion in equities and commodities as bank failures brought fears to traders today. If fear and risk aversion continues, we may see traders pull out of those assets and move back into the Greenback. Are market players finally seeing that there are still problems in the economy? It’s still hard to tell and pick a direction, so we’ll just have to continue to play what the market gives us and be nimble and quick. Stay tuned!
Trade Idea: 2009-08-31 16:42
Welcome to another week of exciting Forex trading action! Well, it hasn’t been too exciting during the summer, but this week may bring some crazy volatility with so much data coming up. Time to grab some quick pips?
Well, I don’t know if it’ll be quick, but I do have an idea on EURUSD that I will take as I see a potential for sellers to jump back in and potentially push the pair lower. First, the pair has been trading in between 1.4000 and 1.4450 for the past month and it looks like 1.4400 has held quite nicely. The 1.4400 – 1.4500 area continues to be an attractive area for sellers to jump in short, especially as i see bearish divergence on the 4-hour chart. We saw higher “highs” in price and lower “highs” on stochastics. This pattern tends to indicate a bearish move. So, if I see a test of previous resistance at 1.4400, I will go short.
My stop will be 125 pips, which is the daily average true range of EURUSD. This should give me enough breathing room to weather volatility during this week’s plethora of economic data releases. I will ultimately target the bottom of the range drawn on the chart at 1.4050, and most likely take some profits along the way if the trade goes my way. Here’s what I am going to do:
Short EURUSD at 1.4400, stop at 1.4525, pt1 at 1.4275, pt2 at 1.4050
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
Fundamentally, we do have tons of economic data this week on the Forex calendar, so I’m not even going to attempt to have an opinion on the fundamental outlook. So much data has the potential to surprise and sentiment can change on a dime. I’m just going to let my trade go and see how the market reacts – I will adjust to data if necessary. Of course, if my trade is still open right before this Friday’s US jobs data, I will adjust or close my position before that event. Stay tuned and good luck!
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