ForexSpirit

The grind higher achieved in yesterday’s NY session looked to be giving up the ghost. Price had slide down from 1.4340 over the past two hours. Would yesterday’s resistance level of 1.4280 now act as decent support?

I decided to hold on forming a bias until I saw how price reacted to 1.4280.

Bias: short
Conviction: medium

Price slid through 1.4280 like a knife through butter. I went with a short bias and almost immediately entered a short trade. With such a sustained strong move down I really wanted to try and hold out for a full 10 pips.

Price ranged sideways for a long, long time. I was prepared to enter a second leg if price retested 1.4280 but it never did. I didn’t think the minor resistance level forming at 1.4275 gave enough separation between entries, so I held off.

In the end I spent three-quarters of the hour just sitting, waiting for price to either break down so I could exit or up so I could add another leg. If my entry point had been a bit higher I would have been able to bag the full 10 pips and so could have taken another entry or two. If my entry had been slightly lower down I would have felt more comfortable adding to the sequence. But I was just stuck in the middle of the range so I waited. I think this is a situation that I have to recognise and consider being aggressive in. There is the chance I’m wrong and managing the position becomes harder and more restrictive by virtue of less arrows in the quiver or I will have to either bail on part or all of the position.

After waiting so long I was going to be happy with anything over 5 pips. When price tested the bottom of the range I was decided not tempt fate any more. I had been in the position more than long enough. I took the 8 pips on offer.

I ended up trading solely in the range for the hour and completely missed the 20 pip drop at the start (as I was seeing how price would react to 1.4280) and the 20 pip drop after I exited (wasn’t mentally ready to jump straight back in after hanging onto the day’s trade for so long).

So out of a 50 pip move I only managed to extract 8 pips. Not exactly stellar but better than a kick in the teeth.