Wednesday, May 17, 2006

Trade On The EURUSD

As promised here is the completed trade on the EURUSD I placed earlier this week.

I had noticed a possible downward trend forming. After placing a couple of trend lines (although this formed more of a pennant/flag) I waited for confirmation at my resistance line.
This being confirmed by a bearish candlestick, I entered my sell trade at 1.2810 the trade continued as predicted and, as I couldn't watch the screen I entered a TSL (trailing stop loss) as well as my usual stop loss. Notice on the 1Hr chart below, that further confirmation is given for the downward movement by the formation of a staggered head and shoulders .
Although my trade went 30+ pips positive at one point, my TSL saved my blushes when the trade reversed while I wasn't watching and cashed me out for a profit of $600.00
See how the trend was eventually reversed in the diagram below. Which often happens in a pennant or flag trading trend mentioned above. The narrowing trading range eventually causes a breakout.
More later - That's all for now, Happy forex trading.
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