Range-Trading

EUR/GBP is more of an "indicator" pair than something i like to trade. For example, if there is overall USD strength in the market, I would use EUR/GBP to help decide whether to go short EUR/USD or GBP/USD. In this case, and because it's a Friday and I'm not expecting any significant breakouts, I really like the range EUR/GBP has been trading.

I drew a resistence line around the 0.8700 level. This hourly chart below shows a nice rally last night and a potential reversal. I shorted a few lots around 0.8650.

Risk: ~50 pips
Reward: ~65 pips

Taking Profit

The EUR/CHF trade seems to be moving along well. right now it's touching the 200 day EMA off the daily chart, which should act as some sort of resistence. This is a great place to take a little profit and take a little risk off the table.

I'm still long the pair with a few remaining lots and will, or course, continue to keep a close eye on it. I'm particularly watching the retracement to the 1.5179 level (61.8% Fib Retracement). If it falls below that, i'll still be profitable and will look for another opportunity to get long. Until then, I'm keeping a few lots and hoping for another rally.

EUR/CHF - Pick Up the Pieces

After missing out on the USD/JPY rally yesterday, as it never retraced enough for me to take on the risk, I'm going to pick up the pieces and move on... EUR/CHF is not the most popular pair in the forex world to trade, but it seems to be falling into a nice setup. The pair rallied over 100 pips in a 24 hour period, which not only isn't unusual but pales in comparison to the 300-plus pip rally the EUR/JPY enjoyed in the same period. Around 2:00am EST, EUR/CHF nose-dived 40 pips and proceded to glide down to the 1.5150 level, which is about a 61.8% Fibonacci Retracement from yesterday's rally and where both the 100 and 200 day EMAs lie.

I labeled the 1.5100 level as the first major support level, seen from the daily chart.

For further confirmation, the weekly chart shows a bullish flag that's been forming since March 2009. Usually, these flag formations resolve in the direction of the previous move, which is upward in this case.
Risk: ~30-70 pips
Reward: ~ 50-140 pips

If You Miss the Train, Wait for the Next One...

A great early lesson on the frustrations of being patient. It looks like I missed a relatively small move in the USD/JPY, about a 50 pip move. The pair never retraced enough for me to pull the trigger and go long. The fact that USD/JPY was trading very close to it's 100 and 200 day EMA off the hourly chart made me picky and hesitant enough not to "chase" this pair. Although the pair has moved higher without me, it certainly didn't "run away." I'm still bullish for the near-term (maybe the rest of the week).

I labeled two different support levels, 92.48 and 91.70. If USD/JPY retraces back into the "Kill Zone," but doesn't fall below 91.70, then I'll go long.

USD/JPY Counter-Trend Opportunity

Although USD/JPY is in a long-term downtrend, there appears to be an opportunity for a counter-trend trade here, as long as it doesn't break below the 91.50 area.





If the price falls and forms some kind of reversal signal around the "kill zone" area (92.75 - 92.00), you're looking at a nice risk/reward trade:

Risk: ~50-125 pips

Reward: ~125-250 pips

Calm Before the Storm

This blog will allow me to share my thoughts through text, pictures and video of what life is like for a new father and forex trader.

As my wife and I are preparing to be first-time parents, the arrival of our twin boys is expected within the next 2-5 weeks. Needless to say, we are very excited, nervous, happy and a whole lot of other emotions rolled into one... Although we will become completely focused on our new kids, i think it's very important NOT to lose site of what's going on in the rest of the world.