EUR/JPY: Bearish Correction After Confirmation of Wedge Falling

Sunday, March 14, 2010

EUR/JPY: Bearish Correction After Confirmation of Wedge Falling

(Click on the Daily chart to enlarge it)

Last week prices broke up the Upper Trendline of a Wedge Falling formation and did a nice pullback to it, unleashing the Bulls from 121.50 up to 125.21. Now prices formed a Double-Top at this resistance level (125.21), so a Bearish correction is expected.
It´s wise to wait for this correction before entering long.
I assume it´s hard to say until where prices will correct. Next support levels are:
* 124.43 (23.60% fibo from 121.91 to 125.21)
* 123.95 (38.20% fibo from 121.91 to 125.21)
So my strategies will be to enter LONG at any significant Bullish candlestick formation at these levels or, obviously, if prices broke up the 125.21 resistance level)

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, March 14, 2010

EUR/JPY: Bearish Correction After Confirmation of Wedge Falling

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