Wednesday, July 23, 2008

Thought process

My thought process in first eur/usd trade was something like this: We have now run towards 720 which so far was support two times. Something got to happen it will break down and I will short it from 720 or we are just testing strength of support and we will have bounce up and possible reversal to the up side. So when it stopped around 725, I was also watching unsuccessful break on usd/jpy pair. That is the point where market can't stay on current level it's going one side or another. I decided for a bounce and I got it. It was great opportunity to stay long with good buy price but I chose not to go for it.

Second eur/usd trade was break even. There was all set up for break of yesterdays low to the upside but it just didn't have force for it. It did break few minutes later but I was busy in gbp/usd trade. Break in the end failed.

Maybe not so good idea in gbp/usd was to short it because all other pairs were reversing dollar weakness. The thing is that was strongest pair for a whole day. It's attractive because it's stretched so profit covering can get nice opportunity but it also can be very costly if it goes on the other side when it's so strong. I was watching 025 level which was R1 pivot so when price touched it and fall back I short it.
When it finally started to fall it was very slow compared to other pairs. It went 20 more pips down after my exit but it also came back for the whole move. I didn't want to risk my scalping profit when I was second guessing my decision of shorting it in the first place, so I was happy to take home profit on that trade.

+18 pips today

Catch up with great posts on Simon Super Trader blog, I had nice conversation with him from post "The reversal in thinking" toward the most current post.



once again I have happy for you FX you are doing very well. Keep doing what you are doing.

FX said...

Thanks man :))