Both weekly and monthly favors an uptrend bias. However, price found resistance @ 88410 and a sell-off of the pair started, allowing a counter-trend bias on the smaller time-frames (H1, H4 & Daily). Also, looking at the Daily Chart, there is a huge H & S Pattern.
The neckline comes in @ the 7950 handle which broke down last week. Using my fibonacci levels on the H1 from the high's of last week @ 82631 and the low's @ 76342. I would look for a decent retracement. Notice that broken support lines up perfectly with zig-zag pattern @ left @ the neckline and also with 50% Fib Level at price 7950. Also trade idea is validated with stochastics being in the overbought territorry on both H1 & H4 time frames. This would meet all the criteria of my trading plan. A short would be executed at 7950 for 5 micro-lots.
My PT would be @ recent low's, and longer term PT for the entire move of the H & S pattern (measured from tip of head to neckline) would be at around 7050. Significant support is @ 7120 & PT could be taken there as well.
Having entered the trade @ 7950, I would have exited 2 micro lots @ 7650, would have yielded a profit of 300 pips for the week and the other 3 micro lots remaining for ultimate PT @ 7120-7050.
Let's see how this trade pans out for the month of October.
I hope I was able to explain my trading plan with this trade idea.
On Friday September 30th, 2011 at 10:21PM by Pipster4lyphe - Like - 0 People
Stop-loss will be almost always 100 pips! Sorry for missing out that important information. This would give me a 3:1 reward:risk ratio and much more if ultimate PT is yielded....remaining position would be a risk free trade.
On Tuesday October 4th, 2011 at 05:10AM by virgiliolayug - Like - 0 People
looks like a solid trade so far. It's dropped a bunch this week. good luck if you still plan on holding it!
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