Forex Blog: Currency Trading

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My reasons for trading the below trade were simple. Right now it could be the start of a massive upmove from this “silly” trade I made. You don’t do that by accident. It was silly though because I did not think quite long enough and hard enough in my opinion on the trade - but who cares if it makes a lot of money, right?

Basically I was looking at the candlesticks on the 4 hourly and the 1 hourly chart. The change in the size of the real bodies on the 1 hourly chart made me enter the trade.

That’s it.

The 4 hourly was bearish.

The 1 hourly had been bearish but the candle previous was tiny, suggesting to me that buyers had had enough.

To an extent I was right so far.

Because we have gone from bearish to sideways with a slight upward bias.

I am trading the overall trend.

I am also now trading a potential bottom that has formed (no puns in forex - but its good to keep a sense of humor for sure).

So, the well formed bottom is in place now.

I’m slightly peeved at the moving average number 20 on the 15 minute chart which has been a spot on resistance,same with the upper band of bollinger bands on the 5 minute chart.

What could happen is a triangle forms (see an earlier post for an example - http://www.sambeatson.com/?p=45 ) and then we will get a break out from that with the pivotal (central) part of the triangle at around 2.0173.

Or, we can see continuing downmove and me getting stopped.

Alternatively, and I favor this theory…the bullish momentum that was seeming to build up in the last hour will continue and we’ll be bullish for a hundred points or more.

Either way, in this case I’m pretty much committed now to allow the trade to take its course and to face the consequences of my actions - although with my “luck” I will be patting myself on the back come morning…

Take care,

Sam