EUR/USD: New Hanging Man on Oct 22th Will Push Prices Down?

Sunday, October 25, 2009

EUR/USD: New Hanging Man on Oct 22th Will Push Prices Down?

(Click on the Daily Chart to enlarge it)

Last Thursday Oct 22th prices formed a beautiful Hanging Man at exactly the top of a Bullish Channel, which was confirmed by friday Oct 23th´s move showing a Bearish Engulfing of the Open and Close of this Hanging Man. An apparent Bearish move is in place...

We have all oscillators favouring this Bearish move: Stochastics at overbought area and MACD and RSI with a Bearish Divergence.

WATCH OUT!!! Last week on Oct 15th we had exactly the same move: a Hanging Man with a Bearish Engulfing the following day, which didn´t work: prices found support at 1.4844 and formed a new top at 1.5060. So the support level 1.4844 is a very important one...

So My strategy is to SELL SHORT at break of 1.4986 with STOP at 1.5015, add lots at break of 1.4968, all with LIMITS at 1.4888 and 1.4844.
If I´m wrong, enter LONG at break of resistance 1.5060...

TRADING STYLE

Even though we are considered Day-Traders, our trading sometimes requires different styles, according to the patterns and/or how the market moves during our trading sessions. All strategies presented in all posts below are for Positioning but, depending on how markets behave, our style can change so that we can capture good trading opportunities......

Our Trading Styles are discriminated as below:

1) Scalping: Short-term trades, usually betwen 2 to 15 minutes, with stops lower than 8 pips, targeting 15 pips. Generally our Scalping trades apply very low stops (5 pips) aiming quick surges in prices of around 10 pips, in a matter of a very few minutes.................................................................................................
2) Day-Trading: this is our main Trading Style where we dedicate most of our time. Their lenght is usually betwen 10 to 60 minutes, sometimes for more than 2 hours, with stops between 10 and 20 pips and targets between 20 and 60 pips...
3) Positioning: Long-Term trades based on Daily and 4-Hour charts, with stops between 20 and 40 pips, targeting minimum 60 pips. Most of these trades have Open Limits......................................................

Money Management

This is a crucial aspect of our trading, considering the different styles we apply to our trading Sessions. As the Positioning Style requires larger stops (usually the double of our Day-Trading Style), their lot size is lower than usual, generally 50% of our standard lot size. As the Scalping style requires lower stops (usually half of our Day-Trading style), their lot size is usually 150% of our standard lot size. For instance: let´s suppose that our current standard lot size is 200K. For Scalping trades the lot size will be 300K and for Positioning it will be 100K...................................

Daily FOREX Analysis - Brasil

Sunday, October 25, 2009

EUR/USD: New Hanging Man on Oct 22th Will Push Prices Down?

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6 Ps: Patience, Perseverance, Passion, Practice, Pull (The Trigger), Paperwork