Monday, May 11, 2009

EUR/USD: Afraid to miss a move?


This blog has become a journey of self disclosure. I believe I was inpatient with this trade because I became afraid to miss the move this morning once price made that 38.2% retracement and broke back above 1.3600. Because of this, I rearranged my mental furniture and talked myself into this trade. I neglected to notice that price was at the top of the ascending channel and really didn't consider that stochastics on every time frame from daily - M30 were Overbought at the time. Also, there is a confluence of support (Weekly PP, 21 SMA, Trend line) right around 1.3500 level that I overlooked. What concerns me about this is that confluences of indicators like that tend to act like magnets for price. Now, I maintain my bullish outlook for the EUR/USD but I think I could have had a much better long entry here. I sold half of my position for a 25 pip loss. I plan on adding that back on if price makes it to that confluence of indicators and they support price.

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