Archives for October 2012

A relatively sedate end to the week.  The EUR continued to make lower highs and after not re-testing the Asian session high, we chose to go short.  There wasn’t any EURO economic news releases scheduled, and the EU Economic Summit moved into Day 2 (yawn).

The trade enabled us to have a very inexpensive stop just above the Asian session high, and our concern was to get through yesterday’s low and the Asian session low without being whipsawed.  These levels were tested and re-tested as expected, and the trade seemed to run out of gas as it passed through the Asian session low – where we would expect breakout sellers to enter the market.  We tightened our stop – now “take profit”  accordingly and ended up with a modest gain to end the week.

Back Tuesday…

Enjoy your weekend!

The UK session didn’t offer any acceptable reward to risk ratio setups overnight.  When this happens, it’s best not to trade and come back tomorrow.

Once the Spanish bond auction news result was released and the EUR started to move up, the stop loss would have been approximately 26 pips and Target 2 was approximately 50 pips away.  Our minimum is 3:1 meaning we needed Target 2 to be 78 pips away from our entry.  We also don’t like stops that large. When this happens, it is best to look at other pairs and when they don’t offer better trade setups, we walk away.

Commodity pairs made large moves overnight.  Both the CAD and AUD strengthened against the USD.    The AUD is usually easier to trade and it set up with a very low risk trade.  Once all major economic news releases were behind us, we entered long with a very cheap stop, giving us a 4:1 reward to risk ratio trade setup.  Price moved up above the Asian session highs and continued to Target 1 and up to Target 2.  At Target 2, we know that price is much more likely to pull back than to advance further.  We closed the trade on the next candle – as the spread kept us from being closed when Target 2 was touched.

The AUD appeared to get a second wind and rose even higher… but without us.  Keep it SIMPLE and NEVER be greedy!

The week continues…

Good luck with your trades!

The EUR set up nicely for us once the German ZEW release came out.  After a large news candle down – a bottom was put in and the EUR moved up to our Target 2.  Protecting our profits as the trade moved in our direction as always…we captured a better than 5:1 reward to risk trade.  When you spot these…they can really help make your weekly trading goals.

Off to a good start for the week.

See you tomorrow.

The CHF looked better to me last night than the EUR.  There was no significant economic news for us to wait through.  A very inexpensive stop coupled with a greater than a 5:1 reward to risk makes this trade very attractive.  Moving our stop down to just above the lower swing highs keep us in profit and our Target 1 and  2 are hit on the same candle.

The concerns for this trade were getting through the Asian session low and having price swing up and take us out at our stop…the classic wash and rinse that breakout traders will suffer 80% of the time.  The second concern was getting through yesterday’s low.  Once price got through yesterday’s low, we were quickly rewarded.

I’m out of town tomorrow…back here Tuesday.

Good luck with your trades tonight!

Quiet trading overall in the UK session, but we managed to squeeze some pips out of the AUD.   The Aussie dollar had been making higher lows and once the breakout traders jumped in long after the UK session got underway, we waited for the pullback.

This entry allowed us to enter with an 8 pips stop loss and a better than 5:1 reward to risk ratio to our Target 2.  The trade progressed fairly quickly allowing us to remove any risk and place our “take profit” below structure.  Price seemed to run out of momentum at our Target 1 with a wicky candle closing below our first target.  We exited on the opening of the next candle for a few pips.

Let’s see what tomorrow brings us.

Good luck in your trading!