Yesterday’s trade, bought Friday at .9242 was profit stopped at .9322 for 80 pips. I also took some partial profits at .9370 for 128 pips.
This pair is rising and falling within a range of .9211 to .9406, its high yesterday. It’s either topping or trying to find the energy for another push upward. The long-term trend line from March (in red on the chart below) is coming in at .9055. A dip to that would be a buy point, given the overall uptrend and the bullish outlook for commodities. Although, as far as commodity prices go, can anyone spell b-u-b-b-l-e? Gold bullion bars going like hot cakes at Harrods in London; new gold traders opening long positions. By the way, what, exactly, does the doom-and-gloom crowd think we’re going to do with gold if the USD collapses? Do they believe the local Safeway or Publix is set up to start weighing little gold nuggets? Or that you can buy your Big Gulp at 7-Eleven with a sprinkle of gold dust? Not to sound like a right-wing, gun-toting, drill baby drill, nut case but if collapse is really coming, guns will be more relevant than gold. At least you could shoot a squirrel for supper. But I digress.
On the 3-hour chart, the pair has formed a hammer. In order for this to be valid the next candle cannot close below the hammer’s low. This scenario is unfolding on the one-hour chart as well so traders don’t have to wait on the three-hour. Price action as it approaches the trend line it recently broke will also be important to watch. So, bottom line, one could buy at the close of the next hourly candle, a touch of the range low at .9211, a touch of the long-term daily uptrend at .9055, or a regaining of the broken trend line depending on what price action looks like at that time. Regardless, I’d watch for signs of topping if it climbs towards yesterday’s highs and either lighten longs or attempt a short.
© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.