EURUSD, Forex No comments yet

EURUSD SHORT @1.23788

By on May 14th, 2010

It is obvious that EURUSD is in a huge bearish downtrend and i decided to be part of this move and of course on a FRIDAY!!

there are pros and cons to this entry point:

PROS:

  • based on the Ichimoku strategy, all the lines are perfectly aligned and this pair shout SHORT.
  • There was an attempt to move the price higher by Bulls on Sunday (shown as the GAP UP on the 4HR Chart) but they failed to hold the price above Kumo and price tanked again, Which is a good bearish sign.
  • price covered the previous low on 1.2528 area.

So all these signs indicates a higher chance of a successful short entry.

CONS:

  • price has just pierced the Daily S3 pivot level and it is almost 100 Pips away from the Monthly S3 Pivot level. there is a strong chance of this being a fake break out meaning that price will reverse and go against me and easily hit my stop loss some 100 Pips away.
  • Today is FRIDAY and we do not have enough traders to support the down move.  Now this position is prone to brokers stop hunting.

Now deciding to enter or waiting on the sidelines is something really tough.

on one hand you see price going down and down and you are just like a deer caught in the headlights, unable to take action and ultimately loosing an opportunity, and on the other hand Support levels will makes it a bit difficult to decide.

Check out the charts and let me know what you think.

Cheers.

UPDATE:

I Closed the position at break even to avoid gaps against my position.

Have a great weekend.

GHTime Code(s): 45c86 4bc23 6958a nc 
EURUSD, Forex No comments yet

EUR/USD trade Closed

By on May 6th, 2010

I was planning to hold this position and ride it all the way down to 1.24 level but because of a very specific market behavior, i decided to bail out of my position and sit on the side lines for another opportunity. it is all about preserving your money after all : ) .

There are times that market operate solely based on panic or mania and that is when we have to avoid new trades or move stops to avoid huge losses. what happened today was a Sell panic an that is quite obvious from the charts. take a look at the screen shot, pay attention to the current candle body and compare that to other candles around it. do you see any difference?

It is almost twice as long as the other candles and this for me triggers an alert that something is not right in the market and that it is time to bail or move your stop very close to price action to avoid huge losses. in my case price just broke the daily S3 pivot level and that normally means Panic.this behavior is sometimes called “Capitulation“

i decided to move my stop to 1.2553 and it did not take long before my stop was hit.

total gain for this trade was 231 Pips.

EURUSD 1HR

GHTime Code(s): a0eab nc 
EURUSD, Forex No comments yet

EUR/USD Short trade

By on May 6th, 2010

EUR/USD is falling and i decided to be a part of it too and as such i shorted the pair at 1.2783.

as you can check on the screen shots, there is a very strong resistance at 1.2865 price level. if call this level a confluence zone. by confluence zone i mean there are multiple resistance level stacked on top of each other and give that level a huge resisting power. to count some of them i can say this level is the monthly S2 level pivot, it is also daily S2 level pivot, and it is also the current Kijun Sen level. and that’s what i call a confluence zone. also as it is shown on the 4 hour chart price had retraced back to its Tenkan Sen, filed to penetrate that level and head back down. all these signs gave me a strong reason to jump in the bandwagon. The only risk factor was due to ECB “Europe Central Bank” interest rate announcement today, but i thought there is hardly a chance that ECB will raise its rate from 1% with all this chaos going on in EURO zone.

Daily Chart suggests caution however. We are slightly above the weekly S3 level and price might stop there for a while.

Entered at 1.2783 and stop loss slightly above the resistance confluence zone.

GHTime Code(s): nc nc nc 
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EURUSD SHORT POSITION Closed

By on May 4th, 2010

OK, I was stopped out of the trade at price 1.2985.and earned 105Pips on this trade.

there are a couple of things i have to work on.

  1. define and apply the definition of putting money on the table.
  2. staying in a winning trade as long as possible. normally this is the opposite(staying in a loosing trade hoping it will come back : ) )

I still have to find a way to stay in a trade and yet not leave money on the table. for this i am using Heiken Ashi charts to trail my stop on the time frame i entered the trade.

for example, i entered this trade on the 1Hr chart, so i use Heiken Ashi on the same time frame to trail my stop.

The rational behind exiting at this level was only the importance of the price level EURUSD was getting into. this level was touched once back in April 2009 and price never got back to this level.

other than that all Ichimoku components shout SHORT.

here are the screen shots of my trade when i closed it.

Comments are greatly appreciated.

Cheers.

GHTime Code(s): 23ed4 nc 
EURUSD, Forex No comments yet

EURUSD SHORT POSITION

By on May 4th, 2010

OK, Here is the first trade in May. I shorted EURUSD at 1.30907
with stop loss at 1.31817.
Rational behind this trade is as follows:

  1. Monthly chart has just broken the cloud to the downside.
  2. Weekly and daily charts have perfect setups in terms of Ichimoku components positioning. (please refer to my first post and go to the links i provided for further information).
  3. 4Hr and 1 Hr clearly broke the support level at about 1.3120.

The only concerning thing about this trade is the fact that the Average daily range (Sundays not included) for 30 days shows that this pair has already covered the range for today and there is a chance that this pair might hover around the entry price for a while and this is psychologically hard to handle specifically when you are sitting in negative territories. ; )

i terms of psychology, i am confident because i have a strong signal across the board and i am following my system, and there is always a chance to loose even in the best trade setups.

I use the following abbreviations for different components of Ichimoku Kinko Hyo:

TK: Tenkan Sen.

KJ: Kijun Sen.

CS: Chikou Span

SB: Senkou Span B.

SA: Senkou Span A.

I use the following colors for each line in all my screen shots:

Green: TK, Red: KJ, Purple: CS, Red dotted line: SB and Green Dotted line: SA

Rating Each trade:

I believe rating each trade with an A,B,C,D system is a good way to improve as a trader and creates a scale to evaluate the validity and value of each trade. I wouldgive this trade a B because:

1- The ADR is consumed for the day.

2- There is a chance that this is a head fake and price will return back to its previous range.

GHTime Code(s): nc e3d94