Trade Closed: 2012-1-23 00:40
As you can see, I got the reversal candlesticks that I had been waiting for. When I saw that a bearish candle formed after the doji, I sold the pair at market and got in at 1.2845. The trade worked well for a bit, but price soon reversed and rallied strongly due to optimism towards Greece’s debt deal. I then got stopped out at 1.2900.
To be honest, I’m not too bummed on this trade. After all, even though my analysis was incorrect, I did follow my trade plan strictly! Ah well, better luck next time!
Sell EUR/USD at 1.2845, stopped out at 1.2900: -55 pips/-1.00%
Trade Idea: 2012-1-19 00:15
Alright folks, today, I have a “sorta” counter-trend trade idea on EUR/USD. I say “sorta” simply because while it has been trending upwards the past few days, but in the longer time frame, the pair is on a downtrend.
As you can see, the pair is currently testing a broken-support-turned-resistance level. With Stochastic in overbought territory again, this usually means that going short is a good idea. However, I’ll be a little bit more cautious.
I still haven’t won a trade this year, so I’ll play it safe. There’s a pretty big event risk coming up and I don’t want to get whipsawed. As you’ve probably heard by now, Greece is due to conclude its talks with private sector creditors about another debt deal.
Personally, I don’t really have my hopes up for the meeting and I’m pretty bearish on the euro. Why? It’s because whether or not Greek officials get a go signal for more aid, the truth is that the sovereign crisis will still be far from over. However, like Pip Diddy, I understand that I also have to give the shared currency props for its resilience on the charts. And who knows, a positive outcome from the meeting may actually give the euro a big boost. Err, I wouldn’t want to have a short euro position open if that happens.
So my plan is to wait for another confirmation in the form of a candlestick pattern. It could be any type of bearish candlestick: a shooting star, a doji, a bearish marubozu – the important thing is that it should point to a reversal.
That’s it, folks! But before I end this post, let me just repeat that I HAVE NOT ENTERED YET. I WILL BE EXTREMELY CAUTIOUS GIVEN THE UPCOMING GREEK DEBT DEAL. I will wait for confirmation before jumping in. Wish me luck!
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.