Yesterday, I wrote that 1.4319 was a likely target and Euro touched 1.4307 last night before falling back to a low of 1.4207, thus taking out my long position I had established at 1.4188. I probably should have left the stop at breakeven—19 pips isn't worth waking up for—but that's neither here nor there. The question, once taken out, is does one get back in? If so, where? It always amazes me that traders who get stopped out don't have a clue as to the answers to these questions.
On the short, three-hour chart, I think it's possible the Euro can get to 1.4400 but it seems as though it's going to be a long grind. The high last night of 1.4307 was only 20 pips higher than the day before. Obviously, there is some pressure on the pair. However, as long as the Euro stays above 1.4261, higher highs are possible. 1.4390 is .382 of the move down from 1.4942 to 1.4049 and 1.4342 is .618 of the move down from 1.4588. 1.4440 is 1.618 of the A leg of the ABC correction I wrote about yesterday. Moving right along the upper boundary of the rectangle on the three-hour chart, the boundary hits a confluence point around 1.4386. So, I entered long again earlier this morning, albeit at a much less attractive price than yesterday (1.4237 versus the prior 1.4188).
© Dianne Fecteau, 2011. 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.