Monday, December 12, 2011
Let me start by saying I actually entered this trade on Friday going into the weekend, but hey I had my reasons lol. I have been waiting for the opportunity to go "anti-euro" for a while ever since it struggled to get above the 100 ma (black) cleanly. It found resistance in the .3500 area and shot back down for a nice engulfing bear candle (arrow 1). At that point I was looking to get under the .25% deviation envelope of the 50 ma (blue). I actually entered first at the close of this trendwall and 50 ma break (arrow 2) and got stopped out from market reaction of the European summit, probably shorts covering ahead of the weekend. I lost 100 pips, ouch! Eh o well, on to the next trade. I decided to play the bounce off of the lower envelope band of the 50 ma considering the fact I could get a good R:R still being below the 50 ma and below this nice trendwall (arrow 3). I figured if the summit proceeded as optimistically rumors had it, we would definitely have seen a bigger jump IMO; the market simply struggled. I got in and with the news of today's Moody's credit downgrade possibility, rode with the bears down to .3200 -.3180 where there's monthly trendwall action. This is the same trendwall I have had my eyes on since before Thanksgiving. I have seen as much as 200 pips but took profits 180, not bad. I closed half and I'll wait to see what price action tells me. If I don't see any bearish action next London session I'll probably pull out, if not, I'll ride down some more.
Sunday, December 4, 2011
Saturday, November 26, 2011
I entered my short trade once we got a solid close back under the 50 MA on the 4 hour chart. I enter my positions based on the 4 hour chart. I use moving average envelopes of .25% deviation which helps me determine the strength of the move away from the moving average. I usually aim for 200 pips while risking 75-100 depending how much support/resistance my stop is below/above. I noticed .3450 was particularly a solid support area that I wanted to see break before any attempts for price to continue down.
Looking at that monthly trendwall on the weekly chart, we can see that last weeks price action down leaves the trend line exposed to AT LEAST be tested. It looks like I will reach my target and I will most likely close the rest of my position at that point. By that time, the 4hr RSI will be oversold and the Daily RSI will be at a value really close to 30. Therefore, I'm going to expect a pullback that I might be able to ride up before another move down. If I can get a long entry at a good price once I get a close above the 50 MA, I will have a very strong support area for my stop loss to be under. After all, I will be doing what every trader does, buying at support and selling at resistance in which this case I will become a buyer. Hopefully my first blog entry was helpful and understandable, for you will read a lot more from me.