Wednesday, January 7, 2009

Fading the move out of yesterday's EUR/USD momoreversal.







Yesterday I paper traded the move out of 07:30 EST for 47 ticks. Today, some 25 hours later, I see that it made it to 1.3700- 400ticks! In time, I hope to take more out of these moves that I'm finding by trading 2 contracts and letting one of them run to larger resistances/supports (or, obviously, stop me out for a smaller gain) I like the idea of "free trades"....taking off half your position above 1R and then relaxing after that!



I found another one which triggered into 22:45EST (04:45 for me!) I noticed the potential for it about 45mins beforehand, after seeing the three waves of upside fail to create a larger move down. When the highs got taken out at 22.05EST, I hung around to see if it would play out as I thought it would. It stalled right at that larger 60min resistance and also those highlighted in blue on the 5min chart. I got in at 1.3508...perhaps a tick or 3 sooner than I'd normally shoot for in a similar setup. My stop was 1.3520. On the 60min and 5min charts, I've drawn another trendline that runs pretty much parallel to the aforementioned 60min resistance...this gave a target of 1.3487 as an initial scalp target. I had my order on the books but forgot to tick the "allow order to be filled outside of regular trading hours" box!!! I changed it as price came into that level but it got away from me. I froze, knowing that I should just exit after a missed target but hoped (bad word! lol) that it'd get back down there-it didn't. I got stopped out at 1.3501 with a trailing stop which, incidentally should have been closer but I hadn't updated it as I was dealing with my mistake.






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