A-B-C-D Trade - page 108
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Completing the trifecta is EUR/USD breakout of triangle.
Gold made a FE 161.8
EUR/USD rises above daily high, perhaps dragged by cross EUR/CHF after negative Swiss data. Hit resistance 1.3824 which is wide 61.8 as well as MML.
AUD/USD similar as trading in tandem with EUR/USD. Resistance for this pair is its 138.2 from previous low/high.
ECB at 12:45
AUD/USD bounce opportunity at 1.1047 previous high from Feb 1st and 1.1045 resistance from another fib.
Allow portion or all position with cushion for early birds making bounce happen sooner..
AUD/USD layered entries now at +1.1%
Market now will cycle through data 08:55-10:00. Can take partial or all profit here at 38.2% from 07:15 low.
As anticipated at 12:45, the ECB held rates but Trichet’s remarks doubting near-term interest rate hike (dovish) helped pressure the EURO. Together with positive USD data at 13:30, large spike down for EUR/USD. U.S. Fed Chief Bernanke spoke at 18:00, nothing new. Market anticipating positive NFP tomorrow
1) EUR/USD
Technical standpoint, pair made 261.8 extension from plot Feb 2nd high to low. Also look at this interesting plot:
Low = Feb 1st Open price 1.3711
High = Feb 2nd High 1.3860
Feb 2nd low was a hit on the 61.8% retrace fib, after bouncing off the 50%. It proceeded to tap the 23.6* before the swing down..
The 15-min chart shows pair making a small bounce off of the 138.2. It can be small due to the force of the reaction to data/news. After the pivot, it hit the 161.8. This is the higher probable bounce (161.8) and indeed pullback to the 138.2 for a 35 gross pip opportunity.
* The market did not respect the Swing C to the 23.6, instead using 1.3816 established early Asian. This can be related to commercial data feed differential. With that price, the FE 161.8 was about the same as the regular 138.2, and the FE 200 same as regular 161.8.
There was a 30-min BAJA BUY signal at the bottom 15:30 2nd dip candle. 15-min entry at 16:00 1.3627, gave 30-pip gross to the 23.6. Pair now retesting bottom.
To calculate how many lots, or min-lots, to take-profit, and moving to a new stop-loss:
Formula is:
1) New Risk $ (new stop-loss $)
Divided By
(New Risk $ + Take-Profit $)
= Ratio
2) Ratio multiplied by original number of lots = # lots to exit.
**
Example for pairs with $10 pip value:
Original 4.2 lots traded
Original take-profit 12 pips $504
New Stop-Loss $294 (7 pips)
Formula:
$294 divided by ($294 + $504) = 36.8%
4.2 lots multiplied by 36.8% = 1.55 lots to exit
Double check:
1.55 lots X 12 pips (profit) X $10 = $186 EXIT
2.65 lots X 7 pips (new S/L) X $10 = $186 Balance still in trade, maximum risk.
Figures are rounded, and taken to 2 decimals for lot size. You may round to 1 decimal. We'll add this to the google docs risk/reward calculator template. For other pairs, just substitute $10 pip value for each stage.
Making moves like this allows trader to "trend the balance" without further risk. Obviously, this risk limitation excludes data/news release reaction that can cause spikes and slippage.
EUR/USD and AUD/USd up against resistance at 1.3640 and 1.0193 respectively.
Only major data ahead of US NFP and Unemployment is CAD data at 12:00, thus institutional traders taking their positions.
Time window allows for bounce trade(s).
Plot trend line on AUD/USD, and use MurreyMath_1.0, which we have been monitoring since top is 8/8th.
Gold testing bottom of triangle as well as 180-degree on 1-Hour Gann_SQ9. THis is area of 23.6 from plot using swing low on Feb 3rd.