I shorted EURUSD again yesterday morning at 1.4585 as it reached up and touched the bottom of the daily uptrend channel. The high was 1.4591 and it was just one of those lucky moments where I happened to sell near a top. They say people make their own luck. I was hovering over the Euro, looking for a rally and I knew that was the bottom of the channel so I decided it was about the best I was going to get. I sold. Guess I made my own luck. I took some profits off the table at 1.4492 (+ 93 pips) not because I was trading in the middle of the night, but because I left a buy order in place to do so. Now, the stop is above breakeven (+130) on the remainder of the trade, (which is currently up 230 pips), so I can forget it. Especially, since I’m trying to wind down for the holidays.
Questioning minds want to know….how low could it go? Support levels come in at the following levels:
2) 1.4192/1.4209—Double bottom (late August/Early September)
4) 1.3728/48—May, June lows (Bet this level would make the Euro bulls go, “Wow!” or maybe “Ow!”
There’s an old trader’s saying that says, “Don’t tell me what. Tell me when.” Alas, one doesn’t know when, although those using time or cycle analysis will sometimes predict. Without getting into all that, though, the value of knowing support levels is that you can be alert to price behavior at those points and look for confirming clues as to how you might trade. It’s also important to watch price behavior to look at when you might lighten shorts. I tend to leave profitable trades on but take partial profits as they go. Others might have a definite target in mind and close the trade at that point. The important thing is to have an approach.
As I pointed out several times in the last month or so, Euro was looking weaker. Then too, bad news came out of Eurozone over the last couple of days and this obviously had an impact as to why now. However, as I’ve also pointed out, Euro bulls are fiercely protective of their Euro and hate to give up on it. We’ll just have to see how this plays out. A definitive answer will most likely have to wait until after the holidays.
Here’s the daily chart with the support levels drawn in pretty holiday shades of green and red. For those new to reading the blog (Welcome!) my trade is the little triangle on the uptrend line.
© 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.