EUR/USD Breakout 16/03/2012

Following on from my previous post I traded the EURUSD Thursday night (Sydney time).
I traded the inside ranges with mixed success and until price action broke the dotted blue signaling a breakout above the previous highest high. As it was late in the night I decided to set my stop and limit target (Price target) and go to bed. Either I get stopped out for a loss or it hits my limited order for a profit. Of course the risk with this strategy is that price can go in my direction and even get very close to my price target, reverse and then come back and hit my stop loss.


Lucky this didn't happen and I awoke in the morning for a nice 45 point profit.

You can also see another retest of the breakout before moving up strongly.
Entry = 1.30586 Exit = 1.31042 :>

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Till next time

AUS/USD Intraday Breakout Trade - "Know when to hold them, know when to fold them"

Firstly let me apologize for not posting for a while, I have been extremely busy, which means I have had little time to trade. 

For this trade on the  9/3/2012 I used IG Markets standard chart with out any bells and whistle.

The context of the trade was that the Aussie dollar has been falling for the last few days, a counter trend starting forming with a classic reversed Head & Shoulders pattern as seen in the chart. Now Head and Shoulders are easy to measure for the move if they breakout. So the target was approx 1.679 for a nice move up, however this is where the concept of context is Vital and a good understanding of what a counter trend is.

A counter trend is the rise in price which goes against the prevailing  trend. Now the trend is well set in and quite obvious to the naked eye. A better way of looking at it is to imagine running up a steep hill knowing that you are going to run out puff soon. So the traders that trade these setups are scalpers looking for a very quick profit  before price runs out of puff.

So looking at the chart the reversed Head & Shoulder and sideways build up of the last shoulder showed good promise of a breakout to the upside. Price did breakout and I waited for a retest of the breakout. Meaning I wanted to see a bounce or reversal of the original breakout level. This is a good sign of strength. This happened perfectly and I entered my trade at 1.06478 and watched it shoot up strongly to approx 1.06640 before starting to fail.

Now at this point  I had to make a quick decision. This is where context plays a vital role, if the larger over trend was long (up) then I would have held on in the hope of the reversed Head &Shoulders reaching its measured move. However as I know its against the overall trend eg a counter trend,  and I know that this is a scalpers trade setup,  I better get out on any sign of weakness. The first red bar that closed on the 5min was my signal to exit. I sold for 12 points, time in the market 20mins.

I then went off to the Gym only to return to see that price action had reverted back to the overall trend of doing down.  

Had I stay I assume that I may have captured 3/4 of the move down. Oh well maybe next time.......Till then.