The drop to 1.5820 profit-stopped me out at +20 pips.
I shorted again this morning at 1.5910. However, with the strong uptrend this pair has been experiencing, a short is definitely bucking the trend. it's only because the .618 retracement is causing it to falter, the fact that I can have a tight stop and the reality that a corrective move down is overdue that makes me willing to risk a short position. The pair is fighting the move down which means the bulls are buying this small drop. I will be willing to reverse as there is more upside potential if the pair overtakes the 1.5958 resistance. Let's see what happens today.
Resistance is at 1.5958, 1.6000, and 1.6070. Support is at 1.5820, 1.5696 (Monday's low) and 1.5530.
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.