December 19, 2008
Weekly Trading Update - December 15-19
Well although it was an eventful week on the markets, no trades were triggered using my main 4 hour strategy, although that's mainly because two of the major pairs, the GBP/USD and EUR/USD pairs, are in transitional periods after turning bullish on the daily charts (see previous posts for details).
I do still have one trade to report which occurred earlier today. I've been watching the EUR/USD closely over the last couple of days and was of the opinion that this pair would dip back below it's EMA (200) and therefore back below 1.40 at some point.
Dropping down to the 4 hour charts I noticed early this morning that there was a very interesting base being formed over 4 consecutive bars in which the low of around 1.4184, and subsequently 1.4200, was acting as a strong support level. I therefore figured that if we were to break downwards below this support level then we could see a strong sustained move downwards, particularly as the last 3 candles all had very small bodies, which usually indicates indecision and the possibility of an imminent breakout.
I therefore placed an order to go short at 1.4180, just below the low of 1.4184, with a profit target and stop loss of 100 points. I was only playing with small stakes on this one as this isn't one of my normal trading strategies, but thankfully this support was indeed broken this morning and my target price was obtained in pretty quick time, which is always a bonus.
After a pretty boring week it was nice to actually enter a position, and more importantly make a profit, even if it was only for small stakes. What was most satisfying is that I didn't use a single technical indicator for this trade. I just went with the momentum when a long-established support level was broken.
Anyway have a good weekend everyone. I shall probably be back next week with one more post before Christmas. In the meantime if you haven't already done so, you can gain access to my main 4 hour trading strategy (which does usually generate 1 or 2 trades per week) by filling in the short form above.