My long from 1.0414 didn’t get stopped out yesterday although I had the stop within a couple of pips of the low at 1.0395. I didn’t have much hope for this trade because of the energy with which it had probed below 1.04 (last week’s bottom) but there you go. If I’d been watching the chart minute by minute I might have bailed out of it; fortunately I was traveling so I didn’t have that opportunity. I don’t agree by any means with everything Gann said but I do agree with his writing about making your decisions away from the charts—that is printing them off, deciding what to do and when, and not being influenced by moment to moment prices. He wrote in Truth of the Stock Tape, “The best way to read the tape correctly is to stay away from it. Get the records of the day's prices and the volume of sales, make up your chart and judge it when you are not influenced by rumors, gossip or reports or by the way the tape looks when it is making a move that only lasts thirty minutes or one hour. ... Again, I emphasize the fact that the correct way to read the tape and interpret it accurately, is to stay away from it.”
Currently, the Swissy is fighting resistance at 1.0457. If it manages to get through this then it will find some significant resistance in the 1.0502 to 1.0546 price zone, an area marked by prior support and resistance (polarity) and fib confluence. Beyond that, just below 1.06 is additional price resistance and the 21 day simple moving average. So this trade isn’t quite out of the woods yet. I could always sell here but I’m long and my stop is now at breakeven so given that I don’t usually trade on summer Friday’s and given that I have no risk, I’ll stay in the trade.
Here’s the three-hour chart:
© 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.
Friday, July 23, 2010
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