ForexSpirit

The re-jigging of a EUR/USD limit order is noteworthy in that I saw myself falling into a trap that I had previously been snared by but I took corrective action in time.

Just after 13:30 EST I placed a limit buy order at 1.3000 on EUR/USD. While a nice round number (and thus one of the prime levels that I like to scalp around) it was also smack bang in the middle of a range that had developed over the course of the morning between 1.2960 and 1.3040.

Spotting my faux pas in time I moved my limit order to the lower end of the range at 1.2976.

Total daily pips: 51

The upcoming week will probably be relatively quiet for trading. As well as the usual Thanksgiving festivities on Thursday and Friday which usually results in minimal volume and thus precarious trading conditions, I’m also taking the first three days of the week off.

In between running errands, putting up ceiling fans and shelves and other DIY tasks around the new house I’m going to try and have a rest. Unfortunately that doesn’t leave much time for trading.

Even so, I managed six positive scalping trades today.

Total daily pips: 60

GBP/USD was my bane today, while EUR/USD and EUR/JPY were sweet as pie.

Let’s examine the two dodgy sterling trades. The first one occurred at 11:30 EST when price was retracing the major down move that had taken place over the previous two hours.

I did not have a sell limit order in place to catch the bounce off 1.4800. Instead I noticed that the bounce had occurred a few minutes later. I felt like I had missed out on a prime scalping opportunity and rashly jumped in as price was hovering at around 1.4790.

Price went essentially nowhere for the following few minutes and as I reflected on why I had entered the trade I realised that I had entered for the wrong reason. I had entered due to missing the initial bounce. I was chasing the market not trading it.

After recognising what I was doing and its futility I exited the trade for a 17 pip loss.

The second losing trade I took today was the result of a combination of factors.

I placed a limit sell order at 1.4845 during the lunch hour. It was placed in line with the high reached just after noon. This was an okay resistance point to select but in retrospect only having one data point forming that resistance level did not lend it too much strength.

Sterling’s rise into the week’s close is probably tied to the huge up move experienced in the US equity markets during the same time (which in turn is probably attributed to the announcement of Tim Geithner as Obama’s nominee for Treasury Secretary).

With so little time left before the close of the markets (and with Oanda’s drastic widening of spreads going into the weekend) it did not seem likely that my entry point, never mind my profit target was going to reached.

I do not want to hold trades over the weekend so I closed out the trade for a 54 pip loss.

Overall it was a good day. Just so close to being a great day.

Total daily pips: 39.7

Total weekly pips: (19.7)

Some much better trading in the second half of the week was almost enough to erase the losses suffered on Monday and Tuesday. If I can just refrain from making those same Mistakes again I think things can only move in the right direction.

Here’s a great chart courtesy of dchart.com that compares the depth and duration of four significant bear markets of the past century:

With the way the currency markets are seemingly tied at the hip of the equity markets it certainly makes sense to pay attention to the gyrations of the DJIA and S&P 500 these days.

Looks like the equity markets might actually end on a high today. With the way they’ve been bouncing around it could have ended either way…

A pretty quiet day today compared to the recent past.

The only real trade of note was the second GBP/USD entry which I did as a continuation trade rather than the more common support/resistance scalp. The 1.4750 area was tested for a second time in late afternoon trading. After an initial bounce the downward pressure remained on and I jumped in as the level gave way, scalping on the momentum of the break.

Total daily pips: 60