Now I don’t trade the daily chart (don’t think I have the patience for it) however I always check it out for something obvious.
From the beginning of November it has been pretty clear that there has been some massive divergence between what has been happening to price and the story being told by the MACD. Price pushed to a new high but the MACD made a lower high and all around the Big Round Number.
As you can see below price pushed to an annual high above 1.5060 however the MACD didn’t agree.
In fact after EURUSD attempted to push for an even higher high, the MACD showed that there was no momentum behind this move (see below).
So it’s action stations for the trade. One and a half is a MASSIVE number and the MACD is showing that EURUSD has a problem here. So a shorting opportunity arises. Next step is to drill down to the preferred time frame for entry – which is the 15 minute chart. All I have been doing is observing the price action around the Big Round Number noticing price has definite resistance to this level and using this observation to my advantage. Taking entries around here for shorts and using 1.5 as target for long positions.
11th November – First chance to go short missed!
EURUSD made it’s move after I had finished for the day – blast!
12TH November – GOTCHA! 80 PIPS IN THE BAG
Didn’t quite get the entry I wanted but made it short at 1.4980 with my stop above the big number 1.50 taking the move down to the next big number at 1.4900. As you can see it went further but I was watching it and got nervous and pulled it. Obviously with hindsight I could have got more. …..but hey ho that’s the way it goes.
Lesson to be learnt
1. I showed remarkable self control when I noticed my entry had been missed the first time around – I think I deserve a pat on the back 🙂
2. It turns out that the 2nd opportunity was the best one anyway – so patience is a virtue