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Anatomy of a Trade!
By Mike Conlon | June 5, 2009
Yesterday I talked about common trading patterns and why they are important to know. I also talked about looking at the news and why that is so important. Today is a perfect example of this. As you may have learned from Sean Hyman’s blog below, today is NFP day! Without rehashing the details of what this means (read Sean’s blog below), let’s take a look at the trade set-up I identified yesterday.
(click charts to enlarge)
The chart on the left is yesterday’s chart of EUR/USD identifying the head and shoulders pattern with the neckline at 1.4127. I mentioned that if the the body *not the wick* of the candle broke the neckline, then that would be a good short opportunity. Well take a look at the chart on the right!
The body did in fact break the neckline at 1.4127 and I entered a short position. As you can see from the chart, there was quite a bit of activity during the release of the NFP and once the market digested the number, it picked the direction it wanted to go. I am now comfortably sitting in a nice short trade with over 100 pips of profit! I am trailing my stop and will probably get out of this trade before the close today as I do not want to be in a position over the weekend.
To learn more about how you can identify winning trades like this one, check out the currency course or visit www.fxedu.com.
Tags: account, buck, commodities, demo, dollar, dow, EUR, Euro, fx, fxedu, interest, interest rate, interest rates, live, money, pair, practice, practice account, recession, ssi, trading, U.S., USD
Topics: What To Look At In The Market |