Here’s a trade from today.
At point 1 price has rallied up to the 1.6000 level for the 2nd time. It can not close above it and in fact the 5 min candle (difficult to see on this chart) actually closes as a high wave candle. I notice that there is divergence on the MACD at the 1.60 level with a double top so I’m looking for an opportunity to go short.
At point 2 the candle are forming hi-wave / doji patterns and price looks tired with every candle having a lower high and a lower low. So I go short at 1.5988 with a stop-loss of 1.6008 and a target of 1.5961 which is 5 points in front of the daily pivot. This is aggressive as I probably should wait for the recent low to be broken.
At point 3 price has continued down but it now starts to put in good sized buyer bars so I decide to cover my position for +10points.
Learning Points:
- I was aggressive getting in, but there was lots of indicators that price would roll-over from that level.
- I was trading against the trend but was happy as the 1.6000 is a strong psych number which I felt price would re-act at.
So only 10 pips however it was a good job that I closed when I did as price rallied strongly north of my stop loss position soon after my position was closed.
Any feedback is appreciated.
October 16, 2009
FX Trading