TRADE #3 OF STAGE 4 ENTERED: SHORT EURUSD: T1, T2 & T3 HIT FOR PROFIT; TRADE WILL BE FULLY PROFITABLE
In my mind, I cannot believe that I am going to short the EURUSD again. My set up is coming up again and I have placed a sell limit order to short the pair.
Here is the set up.
1. The pair is still below the 55 DEMA and the 200 
DEMA on the daily chart. (not shown)
2. The pair is reaching the OB area on a slow stochastics on the 4 hour chart. (click on the pic to the right)
3. The downward trend line has still not been violated to the upside. (purple line)
I want my short entry at 1.3685 and I am going to place a 70 pip stop loss once this is entered. I am going to set my targets tight because this pair has been consolidating for the past few days. The US dollar index is also in an overbought area based upon the stochastics so the USD may fall in value in the next few days leading to this pair rising.
UPDATE: 3.3.2010
The pair was entered at 1.3685 as expected. I am keeping the profits tight as I don't see this pair making a huge move down. Why? The USD index is way overbought based upon the slow stochastics and that the EURUSD pair is way oversold on the daily chart. Basically this pair is in consolidation in the area so I hope I am catching a peak and riding the pair down.
click on the chart to the right to see the targets for profit.
UPDATE: 3.4.2010
The pair has hit my first target and I have moved my stop loss down to 1.3705 which is 20 pips above my entry. I am going to keep the stop loss tight as I expect the pair to be consolidating. Since the stochastic was in the overbought area on the
4 hour chart and the fact that the pair has been in a downtrend based upon the daily and 4 hour charts, this trade should be pretty safe. Again, consider that the USD index is in the overbought area too. So focus on this one, if the USD index is in oversold territory, that means there is a potential for the USD to fall back down to the oversold area on the stochastics. If the USD falls in price, the EURUSD will rise in price. Think of fractions: the EUR is the numerator, the USD is the denominator. If the denominator weakens, the fraction moves higher.
UPDATE: 3.5.2010
The T2 AND T3 were hit overnight for a profit. On the four hour chart, the stochastics are near oversold, so I am going to tighten my stop loss down to 1.3655 so that I will make these 4 contracts totally profitable. I realize that this chart has too many lines on it, but I need these lines to determine my targets and what has happened to the pair since I entered my trade.
I have also attached my 15 minute chart to look at the trade on a microscopic basis so that I can see my targets. NOTE THAT ON THIS CHART, I HAVE 
RECOLORED MY CANDLESTICKS TO CORRELATE TO MY NEW TRADING SYSTEM SO DON'T LOOK AT THE CANDLESTICKS ON THE BASES OF GREEN = UP AND RED = DOWN. THAT WOULD BE THE WRONG INTERPRETATION. JUST REALIZE THAT WHEN THE CANDLESTICKS ARE GREEN, THE BIAS IS TO THE UPSIDE AND WHEN THEY ARE RED, THE BIAS IS TO THE DOWNSIDE.
DEMA on the daily chart. (not shown)
2. The pair is reaching the OB area on a slow stochastics on the 4 hour chart. (click on the pic to the right)
3. The downward trend line has still not been violated to the upside. (purple line)
I want my short entry at 1.3685 and I am going to place a 70 pip stop loss once this is entered. I am going to set my targets tight because this pair has been consolidating for the past few days. The US dollar index is also in an overbought area based upon the stochastics so the USD may fall in value in the next few days leading to this pair rising.
UPDATE: 3.3.2010
The pair was entered at 1.3685 as expected. I am keeping the profits tight as I don't see this pair making a huge move down. Why? The USD index is way overbought based upon the slow stochastics and that the EURUSD pair is way oversold on the daily chart. Basically this pair is in consolidation in the area so I hope I am catching a peak and riding the pair down.
click on the chart to the right to see the targets for profit.
UPDATE: 3.4.2010
The pair has hit my first target and I have moved my stop loss down to 1.3705 which is 20 pips above my entry. I am going to keep the stop loss tight as I expect the pair to be consolidating. Since the stochastic was in the overbought area on the
4 hour chart and the fact that the pair has been in a downtrend based upon the daily and 4 hour charts, this trade should be pretty safe. Again, consider that the USD index is in the overbought area too. So focus on this one, if the USD index is in oversold territory, that means there is a potential for the USD to fall back down to the oversold area on the stochastics. If the USD falls in price, the EURUSD will rise in price. Think of fractions: the EUR is the numerator, the USD is the denominator. If the denominator weakens, the fraction moves higher.
UPDATE: 3.5.2010
The T2 AND T3 were hit overnight for a profit. On the four hour chart, the stochastics are near oversold, so I am going to tighten my stop loss down to 1.3655 so that I will make these 4 contracts totally profitable. I realize that this chart has too many lines on it, but I need these lines to determine my targets and what has happened to the pair since I entered my trade.
I have also attached my 15 minute chart to look at the trade on a microscopic basis so that I can see my targets. NOTE THAT ON THIS CHART, I HAVE 
RECOLORED MY CANDLESTICKS TO CORRELATE TO MY NEW TRADING SYSTEM SO DON'T LOOK AT THE CANDLESTICKS ON THE BASES OF GREEN = UP AND RED = DOWN. THAT WOULD BE THE WRONG INTERPRETATION. JUST REALIZE THAT WHEN THE CANDLESTICKS ARE GREEN, THE BIAS IS TO THE UPSIDE AND WHEN THEY ARE RED, THE BIAS IS TO THE DOWNSIDE.
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