[TW] 27-1-2012 EURUSD (short) by Jedster

[Jedster]

After the last week of gains on the EURUSD, there is an almost perfect Doji forming.

It is virtually touching the 85EMA which is a moving average I have on most of my charts and put a lot of faith in.

EURUSD.jpg


Long or Short: Short setup on the DAILY chart
Entry Point: opening price of the 27th Jan, should be around 1.3105
Stop Loss: 1.3188 (5 pips above the high of the 27th)
Profit Target: PT1 around 1.3000 ( next very big round number). Will consider leaving the trade and moving stop to BE if a marabozu candle forms, to allow for larger gains.
Risk Ratio: just over 1:1 (minimum)
Risk involved: 2% of account
Indicators: None (maybe the 85EMA if you count that)


Appreciate there isn't much time as the new candle forms in about 15 minutes...

[ShakaKhan]

Beware of that doji because it seems to be ascending. Have you considered the spike the market experienced Oct. of last year?

Consider the possibility of the price climbing over 1.370

[Jedster]

The doji candle opened at 1.31001 and closed at 1.31044 (with my broker). That's 4 pips. With a daily range well over 100+ pips, I don't consider 4 pips significant.

Just a simple strategy based on classic candlestick formation, right out of the school of pipsology...

[ShakaKhan]

I've had extensive training in pipsiopsychohypno training.....

[satyaki]

Is this some kind of joke dude...EUR/USD is currently at 3215 rather than 3105 // Will you explain the idea that u are having bcz I got nothing from reading ur post.

[Jedster]

Check out the date of the post, it was late last Thursday evening when EURUSD was trading at 1.31.

The trade got stopped out unfortunately, however another identical doji trade on the AUDJPY that evening was perfect. Returned around 3% for 2% risked.

If you don't understand the idea, try reading up on candlestick formations in the school of pipsology...

[Eliminetor]

Hey Jedster.. I am starting to get the hang of the japanese candlesticks in pipsology class..
But if i am correct.. the japanese candlestick that was formed as last, would be considered neutral right (doji).
So then you only base your descending Eur/USD theory on your 85 EMA indicator.. Am I correct?

Michel

[Jedster]

Hi Eliminetor,

I'm not quite sure why you think it is neutral?

You have to remember what the candle is trying to tell you. For several days the price has been climbing, and on thursday the bulls tried to push the price even higher. However the bears stepped in and drove the price back down to the opening price. That is quite some price action, given the upwood trend of the last few days. This is a classic bearish reversal pattern. If the body had been a bit larger, the candle would have been a shooting star. Either way, it is still a pretty good bearish reversal pattern.

I use the 85 EMA as dynamic s/r. The fact that the price was approaching the EMA tells me it is possible that it will turn around and reverse before it gets there. This coupled with the doji was a strong confirmation for me. It would had been even stronger if the wick had touched the EMA.

In this case, the trade failed. Shame, but that at happens. I was happy with the setup and I would probably take it again given the same set of circumstances.