Good morning everyone,
I would like to update you for today.
Please feel free to view the attached image i’ve prepared.
"Trade Update
Good morning from me guys.
The time is 09:30 GMT + 2 and I am just putting in the daily update.
Before we move forward, I just want to clear up �why� I exited where I did on yesterdays trade.
http://www.babypips.com/forums/attachment.php?attachmentid=53&d=1166104541
For those of you who are just starting to read this thread. Entries are colour coded BLUE and POSITIONS EXITS or SQUARES are colour coded RED.
Now back to my elaboration of my exit reasons… Even though we�re trading a mechanical system here, it doesn�t mean that we have to switch into �Dumb� mode; having an automatic gearbox doesn�t mean the steering wheel is going to turn on its own!
The reason I exited was because the price hit S1, which yesterday was located at 1.3169. Supports can be whacky sometimes; today it goes straight through, tomorrow it bounced with 25 - 50 pips in a few seconds… I preferred to play it safe in that situation and take what profits I had, rather than the possibility of half or less later.
Either way as you�ll notice the price did bounce off where we bought back and Squared and if you have set up your MAs like I advised before, you would realize the 10 MA handled the price vary nicely - this is a good sign of continuation in the same direction.
The second reason why I closed of the trade was Stochastics - note how they went into the oversold zone, floated about in there (Which is the continuation of the down move) - then started trying to break out of it to come back up.
This is normally where consolidation starts and you should try and get use to these signals so you can prepare yourselves, as after each consolidation there is a breakout and the 5/10 E-MA crossover is a wonderful breakout signaler.
As you will notice on the chart I was lucky enough to wake up, catch the taxi to work and sit in front of the pc just in time to catch another good entry point signaled by my system.
I�ve entered a long at 1.3145. Although I was a little biased, due to the fact that 1.3131 Support hadn�t been tested yet + the obvious imminent 5/10 crossover on the Daily Chart all pointing to a bearish sentiment.
Regardless, I�m still holding the position now, its broken through 10,20 and its now testing 50 E-MA.
As I mentioned before a price breaking the 50 has intent, so stay alert. At the moment there are two scenarios; 1. The price bounces of the 50 E-Ma and comes back down to test 1.3131 after which we might have a break leading to a much further down move OR 2. The price breaks 50 and goes for Resistance of 1.3190 Or in other words the 100 SMA - colour coded pink, then R1 at 3223, then Resistance at 3252, 3293, 3335, 3364 etc.
These are just scenarios, as a trader you should always have at least 2 or 3 scenarios in order to prepare yourself psychologically.
Why psychologically you ask? Because �Fear� and �Surprise� two of the feelings we try to avoid are spawned by NOT Understanding and NOT being Prepared! If you are aware of something and you expect it as a probable occurrence, then when it happens it can�t surprise you, which in return leaves you calm, cool and ready to react optimally with a sober mind. That is all for now."
Regards,
E. Lang