My remaining long from .8797 profit stopped out at +40 pips.
Yesterday's high was .8871 at which point price seriously began to falter. It makes sense that it would. As I wrote on Monday, .8860 was the top of the rectangle on the weekly chart and .8859 was the June 21 high and polarity. In addition, .8868 is .618 Fib retracement of the .9364 to .8067 move. I didn't short—clearly my mind was elsewhere. One of the "tricks" to good trading is that you have to stay absolutely focused. As my error with Euro yesterday shows, I've been lacking this week. All I can do as a trader is acknowledge this and move on. If I start beating myself up over it, things won't improve. By the way, note that the "trick" is within everyone's capability and doesn't involve esoteric and secretive formulas and mysteries.
The pair has made a double top at .8859 and .8871 but it won't be confirmed until price drops below .8317. That's quite a distance away. Some might argue a triple top with a touch May 7 of .8832 but the confirmation point is even lower with that at .8067. Still, it's something to keep in mind for the long term. It also raises a good question. If AUD is so strong and the USD is so weak, why does AUD keep topping out?
So far today the pair has dipped to .8728. Any gain in price back to .8871will likely bring in sellers (although if a pair repeatedly batters at a price it often can break through). On the 15-minute chart (not shown) there is a hammer with the drop to .8728. A break below that will have sellers coming in.
Here's the weekly chart (my trades don't show on this chart since I use a different charting package for longer term charting):
© Dianne Fecteau, 2010. 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.