ForexSpirit

I was absolutely frazzled last night so I hit the sack early. Even with close to a full eight hours of sleep I didn’t make it in front of my trade station until about 6:05 EDT. The first thing I saw on the 30 seconds chart was the 30 pip drop that had just happened. A quick gander at forexlive.com revealed that it was a spike based on the Greek opposition saying they had rejected the new austerity plan.

It’s quite common for such news spikes to be retraced in short order. That was a major factor in considering having a long option.

On the other hand, Greek woes were still front and centre so a few more attempts at USD strength would be on the cards. The move up during the 4:00 and 5:00 EDT hours resulting in a bounce back below 1.4100 would probably have led me target short moves, even without the news spike.

I decided to play it short as I could rationalise why it might move back higher but also utilise a couple of resistance levels leading up to the high for the day at 1.4115. If instead I went long and price broke south I could easily see it being a trend move for the whole hour which is much harder to trade against. So in the end I went with a short bias.

Bias: short
Conviction: medium

The first purple entry was purely based on seeing price start to break down again. I was going to hold out for a full 10 pips on this entry given the sharp news spike that had just happened. Price broke up a bit more and then started going sideways. I added a second leg and proceeded to hold the sequence for a full 10 pips which I got.

When price went back up to test the minor resistance level at 1.4090 I got short again with the first green entry. After the resistance level broke I knew that we’d be seeing 1.4100 for a full retrace of the news spike. I got in a second leg when it broke above 1.4100 in case this was going to be a quick bounce back down.

In the end it continued to push up for a bit more. I would have added a third leg on a test or false breakout of 1.4115. I did contemplate adding a third leg anyway at 6:58 EDT after what looked like a double top at 1.4112. In the end I felt that 1.4005 was too close to my second entry level so just held off.

I could have gone for a BE as price bundled along 1.4095 at the start of the 7:00 EDT hour but I wanted to try and achieve my first greater than one percent day, so I had my TP level set to gather 2.5 pips on the sequence. Price complied and broke down to give me a nice second profit for the day.