Long or Short: Short
Entry Point: Once price tests the 200 SMA (confluence with 50.0% Fib) and the RSI shows overbought
Stop Loss: Anywhere above the 61.8% Fib and 200 SMA
Profit Target/s: Former low at 1.2050ish.
Reward-to-risk Ratio: Depends on the entry/exit
Risk percentage: 2%
Indicators: 200SMA, RSI (9)
Trade Rationale:
This is a mix of technical and fundamentals.
Technical - About to test the significant 200 SMA, confluence with Fibs and about to hit overbought.
Fundamental - Draghi’s speech I believe is only temporary, as euro zone’s situation hasn’t changed. Retracement will give sellers to “sell high.”
You posted your chart before the week was finished.
The 50% fib line @ 1.2366 is already breached. The high on Friday was 1.2389.
The RSI (14) on the 4 hr ended the week @ 61.45, RSI (9) ended the week @ 62.07
MACD is bullish.
The weekly chart short a full bullish engulfing candle.
The daily shows higher high, higher lows.
Daily indicators show bullish momentum, bullish RSI, Bullish QQE, bullish Gann HiLO
I wish you good luck, but it is obvious I didn’t vote for your trade plan.
A tip for you: Wait till after weekly close to make your plans.
Of course it is not impossible that it will go down, depending of the value of Draghi’s speech over the weekend, but the signs show that the upside is not done yet.
If the ECB starts buying bonds next week, keeping the interest for Spain and Italy lower, we’re looking at a few hundred pips higher in the 1.26xx or maybe even a double top @ 1.2747
My conclusion, weekly chart = bullish, daily = bullish, 4 hr = bullish, only the 1 hour chart shows more bearish.
Another possibility is that we pull back to 1.2170 area and go up from there, but by no means I see 1.2050 coming back very soon. Take also in consideration that Dow Jones has breached 13000 so that might act as support.
It could be a “risk on” week.
Also there is important news next week. FOMC statement, Employment numbers.
Especially FOMC can change the whole look.
Well, hindsight is always perfect and I must say that there’s always luck involved. I’m taking profit around 1.2100, but I’ve taken half my position off the table and placed my stop at my entry (1.2368) for a risk free trade.
[B]I think I totally do not understand this trade of the week stuff.[/B]
I had my comments on this trade, and totally surprised, I see that here is the winner of the week while the week is just starting @ London opening on Monday.
For this trade at that time entry point was not reached, target was not reached, yet we have a winner.
The winner is picked based on votes ( i.e, trade idea that those who voted deem to be the best ), regardless of whether it goes on to be a winner or a loser.
Thanks Dudest.
Ah now I see, so the winner of the week is most of the time the one who comes up with the most stupid trade, that is bound to lose. Because that’s what most traders will vote for.
But knowing this, it’s been the last time that I will vote.
I really thought this was a contest of who had the best trade of the week, execute it and show the profits.
And all decided at the END of the week.
I like how you have so much free time to comment about these. I don’t believe his trade was stupid at all. It was headed in the right direction, just that he predicted the wrong T/P. You should just keep your comments to yourself.
Is it still a bullish week? we are talking about Aug? or past event? , If you look at the Daily, then you could somehow say its a bullish month? week of 6-10th looks pretty bearish to me.
