Good evening forex friends! To start out the week, I've decided one of the most obvious setups out there at moment: the EUR/USD range. Will the euro continue to hold steady?
Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.
I'm keeping it really simple with my first trade of the week. It looks like traders aren't ready to take EUR/USD anywhere as Greek debt deal talks continue to drag on. Seeing as how I think this may continue for quite some time, probably until March 20
when Greece has to drop a 14.5B euro payment, I'm gonna play the range for a swing/day trade.
The range is clear on the 60 minute chart above and if the market does retest the 1.3200 above, I'll look to go short there. My stop will be about the daily ATR, and I will target Monday's lows. Here's what I am going to do:
Short EUR/USD at 1.3195, stop at 1.3260, pt at 1.3030
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Risk Disclosure.
This trade structure gives me a potential 2.5:1 return-on-risk, and with event risk this week on the forex calendar (most notably the ECB interest rate meeting), I am reducing my risk to 0.50% of my account. If the trade does work out my way, I may hold on longer and possibly scale into it, giving me a higher potential return-on-risk.
Given my negative bias on the European debt situation, I'm more reluctant to take a long trade, but if the behavior is right on another retest of the bottom of that range, I'll look to go in. And as always, if the market environment shifts on a new catalyst, I'll be sure to adjust my open orders or open position quickly. Be sure to follow me on Twitter and Facebook for updates. Thanks for checking out my blog...good luck and good trading!
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