PipOmatic

During the Asian session price moved down to meet my first target point of 104.56 banking me 207 pips in the process on the first lot. This has happened much faster than I anticipated but I’m not complaining

I expect some consolidation or retracement before moving much lower but with the uncertainty in the equity markets at the moment, who knows !!

Anyway, now my first target has been reached, I have moved my stop loss to my entry point giving me a free ride from here on in.

Price managed to get down to my first target of 1.0615 so that is 55 pips gained on the first lot. Price looks to be taking a breather just now but hopefully it will resume it’s down trend and get to my second target of 1.5840.

I have moved my stop to break even, so what ever else happens I have some pips in the bank.

Just a quick update to show my entry was triggered and price looks to be heading in the right direct.

Fingers crossed, my first target may get hit today allowing me to move my stop to break even.

I am looking at shorting the EURCHF based on the Daily time frame using the Hector trading method.

The Daily chart shows price has come back to the dynamic area of resistance and if you pull a fib retracement, price has stalled at the 38.2%. As there have been higher lows, price has formed an ascending wedge pattern.

So I am thinking a good setup would be for price to follow the BPC technique on the 4 hour chart where price breaks to the down side, followed by a retest of the lower trend line of the wedge and then have a nice push lower giving an entry short just below the previous thrust down at around the 1.6015 area. For a stop placement, I would place this around the 1.6070 area which at the moment looks as though it is above the pull-back price point and above the lower trend line.

Targets:

The first target point I see would be the 1.5950 price point that acted as support previous on 2nd Feb. Then a next target could be 10 to 15 pips above the next swing low of 1.5824.

Hopefully price will move lower to fill my order quite soon to keep up this downward momentum. It price doesn’t push lower to give me an entry today, then I may reconsider the trader as I am looking for the BPC technique to complete within today’s trading session.

I’ve been following the USDJPY pair for some time looking for price to give some indication of where it will go next. You will see from the daily chart (below) that price has been in a strong down trend since mid June 2007. There have been 3 major down swing since then and I believe that price is now giving indications that we are at the start of another move to the down side.

The strategy for this trade is based on the techniques I have learnt from Hector who’s trend following trading course I link to from my blog. Hector’s course is the only one I would recommend to any other trader. I have spent plenty of $$$ on trading education an believe this guy teaches his strategy better than anyone else. You may not trade his system but the individual techniques he teaches in his course can be applied to just about any other judgmental trading system. The way he teaches how to read price action is very easy to follow and after going through his course I believe every trader would be left feeling much more confident on how to read and follow price action.

Anyway, enough of the Hector praising and back to this trade. I am basing the trade on the Daily time frame. As you will see from the daily chart, price looks to have formed a flag pattern and has just given the signal to go short. The actual entry for the trade was taken by analyzing price action on the 4 hour chart.

Looking at the 4 hour chart you will see that price has formed a 1-2-3 pattern and the break of point 2 coincides with the break of the lower flag trend line. The safe entry for this trade would be to wait until price tries to reverse back up to retest the flag trend line and then continue down, but I am fairly confident this signal is strong enough to be a little more aggressive and get in on the trend line and point 2 break.

As this is a daily time frame trade I am going to give the trade plenty of wiggle room, so I have place my stop above the recent high at 108.70.

I have entered the trade with 2 lots and chosen a conservative target of 104.56 for the first lot which gives a risk reward of 1:1. The second target is 101.14 which is based of the 0.786 fibonacci expansion from the 1-2-3 highlighted on the daily chart. Note that long term support exists at 101.67 and 101.26. When price reaches that area I will determine if I close the trade early if price looks like it will reject that area.

Summary: