Diamonds are relatively rare patterns. But yesterday one appeared in the USDCAD as I blogged. Later, I noticed one on the EURUSD hourly chart. I closed my long at 1.4926 (bought at 1.4864 so 62 pips profit) and opened two short positions at 1.4919 and 1.4924. It’s not easy to close a trade that’s in profit on a pair that still seems to have bullish momentum. But it’s what I was committed to doing. So I did.
The double top was confirmed at 1.4919. The high yesterday was 1.4991. Now what? It’s approaching both support and the RSI oversold level on the hourly chart. Remember that yesterday I bought because it climbed out of oversold and the candles were bullish. So I’ll continue to study this today. Momentum must fall on the daily chart before any serious moves down take place. We’ll see that on the shorter time frames first. Stay flexible and gather your pips where you may while it’s in this potential trend reversal area. Here’s the one hour chart:
© 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.