Thread: Trend of the Day

No changes to our positions as we remain short one lot of the EUR/CHF from 1.31325. I am still open to taking a sell signal on the EUR/JPY, but the risk would have to be 112 pips or less to limit my risk to 5% of my account balance. I have checked the B/E (breakeven) column on the log as the EUR/CHF moved halfway to our target of 1.2897 and then reversed and traded up through our entry level. We would have been stopped out at breakeven had we been using that money management strategy. I think we will find that trailing stops just increase the chance of getting stopped out before the market can reach the target. But I am also open to the results proving otherwise. Only time will tell on that one.

The EUR/CHF sits just 50 pips above an all-time low. The daily chart shows a series of lower highs and lower lows which means downtrend and to continue to look for selling opportunities. I would maintain a bearish bias as long as the pair remains below the 1.39241 high noted on the chart.

The Breakout 2 strategy just generated a sell signal on the EUR/JPY. With an entry of 107.44 and a protective stop level at 1.09229, the risk is too much for my account balance. Remember that we are just using the middle stop level for this strategy in order to keep it simple and consistent. I am still open to taking a EUR/JPY sell, but the risk has to be 112 pips or less.

Originally Posted by Thomas Long

The Breakout 2 strategy just generated a sell signal on the EUR/JPY. With an entry of 107.44 and a protective stop level at 1.09229, the risk is too much for my account balance. Remember that we are just using the middle stop level for this strategy in order to keep it simple and consistent. I am still open to taking a EUR/JPY sell, but the risk has to be 112 pips or less.

Hello Tom! I'm wondering why you are looking at middle stop level for breakout 2 strategy?
Thank you!

Originally Posted by Arthurs

Hello Tom! I'm wondering why you are looking at middle stop level for breakout 2 strategy?
Thank you!

The main reason is that it is easy for new traders to duplicate. I did not want to get into too much analysis for this so the strategy can be used by those who are not well versed in the technical side of trading.

Originally Posted by Thomas Long

The main reason is that it is easy for new traders to duplicate. I did not want to get into too much analysis for this so the strategy can be used by those who are not well versed in the technical side of trading.

So Tom, suppose the alert shows four stop levels instead of five, which one would you choose?
King

Originally Posted by lissyking

So Tom, suppose the alert shows four stop levels instead of five, which one would you choose?
King

I would take the third furthest from the entry to remain a little on the conservative side. I want to give the market room to breathe to increase the chance of my limit getting hit instead of my stop.

The EUR continues to weaken while the JPY is being accumulated by traders seeking relative safety. The daily chart shows a market that printed a nine year low last week and appears poised to test that level once again. I would continue to look for selling opportunities as long as the pair remains below the 114.729 high noted on the chart.

No changes to our positions as we remain short one lot of the EUR/CHF from 1.31325 with a profit target set at 1.2897. I am still open to taking a sell signal on the EUR/JPY, but the risk would have to be 112 pips or less to limit my risk to 5% of my account balance.

The EUR/CHF moved down far enough to hit our 1.2897 profit target. With an entry of 1.31325, our profit on the trade was 235.5 pips. At 99 cents (US) a pip, the profit was $231.86 which brings our original account balance of $5,000 up to $5,176.89. I think that what is interesting in our log so far is the fact that both winning trades moved halfway to our profit target and then moved back up through the entry level. Both trades then reversed and moved back down to our target. So if we were moving our stop to breakeven on the initial move halfway to the target, we would have had two breakeven trades instead of two winners. Two trades do not make for a great sampling, but so far, patience and discipline are indeed a trader's best friend.

I am still open to taking the next sell signal in either the EUR/CHF or the EUR/JPY.

The Momentum 1 strategy just generated a sell signal on the EUR/JPY. My entry is at the 106.884 level with my protective stop placed at 107.957. That is a risk of 107.3 pips, so my target to take profit is 214.6 pips below my entry, which is the 104.738 level. That is a risk of $127.69 since each pip is worth $1.19 on the EUR/JPY. My maximum risk level is $258.80 based on 5% of my account balance, so I can take a EUR/CHF sell signal with a risk of just over $100. That would also be a 100 pip maximum in order for me to accept the trade.

No changes to our positions as I remain short one lot of EUR/JPY. At this time, because of the number of news releases scheduled for the rest of the week and the long weekend coming up, I will not open any additional positions for the rest of this week. I am content with letting this trade play out and even if I am stopped out today, will sit on the sidelines until next Tuesday morning.

The CHF has been extremely strong as of late as this daily chart of the USD/CHF confirms. The series of lower highs and lower lows means downtrend and to look for selling opportunities. I would remain bearish as long as the pairs stays below the 106.252 high noted on the chart. The one thing I would be concerned about is the potential for USD strength if the stock market were to sell off strongly. Lately, risk adversion has meant buying the CHF also, but USD buying could change the strength of this current downtrend.

what is difference between volume and volatility?

Originally Posted by thunderbird803

what is difference between volume and volatility?

Volume is the number of lots being traded while volatility is how fast the market moves. It is not unusual to see high volatility in a low volume environment. With more volume comes quieter markets as there are usually enough buyers to take the other side of the trades of the sellers and vice versa.