Tuesday, July 13, 2010

EURGBP—possible evening star

On the daily chart there is the possibility for an evening star candle formation. These patterns require an uptrend with a bullish candle. The second candle is a doji and the third closes well into the first bullish candle. In this case the last bullish candle is rather small. Today is the third candle and no conclusion can be drawn until it is complete. A high above .8419 means the pair is headed higher. The downtrend line on the daily chart is coming in at .8490 where it would make sense to short.

On the hourly chart (not shown) the pair has formed a hammer with a low of .8316. Dipping beneath this low would be suspicious and would be another possible area for a short.

Here's the daily chart:

© Dianne Fecteau, 2010. No
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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.

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