I could be writing this yesterday—in fact I did! I wrote that my trade was up 199 pips and as of this moment, 6:56 AM EST, it’s up 196 pips. So clearly the pair is hesitating a bit. You now see two trades on the chart. The first is my original from 1.0490. I wrote that I took some partial profits at 199 pips and I decided to replace that amount with another trade on the slight dip to 1.0635. That trade now has a stop above breakeven.
I’ve labeled three trend lines on the chart. The pair appears to be coiling within the downtrend line from July and the new daily uptrend line. The coiling means the pair is building up energy. How that energy ultimately manifests itself will be interesting. Nobody, but nobody, can predict with certainty the direction it will take. What we can do, though, is watch price behavior and act on its direction. The market tells you what to do. While I’ve been “validated” in my belief since mid-October that the pair is basing, that doesn’t mean I’m correct overall. This pair has technically not yet reversed its overall downward trend from March. That means it still could violate the 1.0208 low. And you can believe me when I say that I will then change my opinion completely and happily short with the best of them. It’s important to not get married to your opinions. All that said, obviously I’m staying long for now. The resistance levels I wrote about yesterday are still present. I’ll just keep an eye on the charts. Here’s the three 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.