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09/25/2015 DAX, EURUSD

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After Thursday’s DAX daily close Doji candle, above the downward trend line (see the daily chart), and Yellen’s hawkish speech later on that night, I was bullish on the index for Friday. I was able to enter at a good point on Thursday afternoon (after some failed attempts – Point 1 on the 5 minute chart), so I left the position open for the next day and was decided to maintain it – I putted my stop at breakeven, way down.

DAX, Daily chart

DE30_14_42 27_09_daily

DAX, 5 minute chart

DE30_17_02 27_09_5 minutes

But then, at point 2 (5 minute chart), I thought it was a little stretched even though I was still thinking on the long side in the future, and I covered with a short with the same amount, with a tight stop. I managed to get out at breakeven and did the same procedure at point 3, this time removing all the stops (my gain was fixed) because it was near a resistance level and it passed 10am already (usually the activity slows down). I didn’t get out of the short position at breakeven a few minutes later even though the movement seemed somewhat strong because we were close to 13h30, time when US GDP data was about to get released.

Then, at 13h30, data came out and it was pretty good, well above the expected, the 5-minute candle closed above the resistance, so I liquidated the short position with a small loss and even entered another long one, with a stop right below the previous resistance. I moved my stop of the first position to that point as well. Turns out that the price came down and all was liquidated, but I think I would have done it the same way on similar conditions. My money management was ok so I permitted it.

I also entered long yesterday on European stocks in my investment funds for the next couple of days.

What surprised me the most was the behavior of EURUSD on Friday, after the release of the GDP data. As soon as Yellen said those hawkish words Thursday night I entered a short position on the EURUSD with a stop above the 5 minute candle (it was at 22h GMT+0), and it broke the 23.6% Fibonacci level as well, so I left the position open during the night. A little bit before 7am I liquidated it because my position was greater than average and I didn’t want to incur on the risk of a rebound. I ended up entering again 2 times short a little after the 5 minute hammer candle and left right near the minimum of the day, what ended up to be an almost perfect trade.

EURUSD, Daily chart

EURUSD_18_18 27_09_daily

EURUSD, 5 minute chart

EURUSD_18_20 27_09_5 minute

I was still waiting to enter again on the short side due to all the reasons either fundamental either technical on that day and before. After the release of the US data, which was pretty good, and recent comments by Fed’s Bullard as well, I entered short again, with again a most than average size position with a stop above the last 5 minute candle. It was indeed stoped, and I tried to enter (now with smaller positions) above some 4 or 5 times, using Fibonacci retracements, but always being stopped. After these failed attempts, no more than 2 hours later I thought I was ok for the day and didn’t incur on any more risks.

 

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