EURODOLLAR 4-17-2007
If you are thinking about a trade in the E/D today this is what I suggest.
Enter short 3554=low of bar A which is a tepid reversal bar because it is a Sunday bar
Stop 6 to10 pips above 3578=High of bar A
Take profit 3485=38% fibonacci retracement
Risk 29 to 35 pips
The reasons I consider this a high risk play is because the measuring bar A is a Sunday bar for the bear pivot reversal. Even though yesterday's down day occurred on higher volume the higher volume occurred in relation to a Shortened trading day. So, Friday would be a more reasonable day to compare volumes and yesterday's volume did not conquer Friday's volume.
Then we should consider that the trend is up so this is a trade against the trend and as we know most surprises occur in the direction of the trend. However, in light of what I said in yesterday's post it is a calculated risk. Then we are in a position for a reasonable stop-loss if we wait for a pullback to 3554 before we enter. Yes you could enter now but your risk goes up to around 50 pips and counter trend. But each according to his/her own risk tolerance.
If you wait for an intra-day short pivot reversal after a pullback to 3554 like I'm going to do you will be playing it conservative as you can use that pivot as your stop which would probably cut your risk to around 15 pips on a 30min to 1hr short pivot, and place your mental stop above that pivot measuring bar. This is just me being a little conservative since I've been off for a while I'm not feeling so cowboy just yet.
Also, consider that there is important U.S. data coming out at 8:30 am EST and you might want ot wait for that instead of staying up all night waiting for a sharp move when the move is waiting for the data. Many times there is an intra-day pivot just before the news comes out to give you an indication on which direction the move is likely to take.
Enter short 3554=low of bar A which is a tepid reversal bar because it is a Sunday bar
Stop 6 to10 pips above 3578=High of bar A
Take profit 3485=38% fibonacci retracement
Risk 29 to 35 pips
The reasons I consider this a high risk play is because the measuring bar A is a Sunday bar for the bear pivot reversal. Even though yesterday's down day occurred on higher volume the higher volume occurred in relation to a Shortened trading day. So, Friday would be a more reasonable day to compare volumes and yesterday's volume did not conquer Friday's volume.
Then we should consider that the trend is up so this is a trade against the trend and as we know most surprises occur in the direction of the trend. However, in light of what I said in yesterday's post it is a calculated risk. Then we are in a position for a reasonable stop-loss if we wait for a pullback to 3554 before we enter. Yes you could enter now but your risk goes up to around 50 pips and counter trend. But each according to his/her own risk tolerance.
If you wait for an intra-day short pivot reversal after a pullback to 3554 like I'm going to do you will be playing it conservative as you can use that pivot as your stop which would probably cut your risk to around 15 pips on a 30min to 1hr short pivot, and place your mental stop above that pivot measuring bar. This is just me being a little conservative since I've been off for a while I'm not feeling so cowboy just yet.
Also, consider that there is important U.S. data coming out at 8:30 am EST and you might want ot wait for that instead of staying up all night waiting for a sharp move when the move is waiting for the data. Many times there is an intra-day pivot just before the news comes out to give you an indication on which direction the move is likely to take.
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