Trade of the Week (11th Feb 2013) UPDATE

Hi All,

If you’ve been watching the Trade of the Week page you’ll notice that this week I went long the EURUSD – that resulted in the trade being stopped out for a loss.

I thought that, that would be a good trade to review for you to see what happened and why it failed and how I look at the process:

Here’s the chart up to date as of end of business Thursday 14th February 2013:

EURUSD

OK first things first this trade lost me 106 pips.  Refer to the TOW entry for full Entry/Exit details.

Why did I take the trade? – Because it was a classic DTosc reversal (bullish) at key Gann support levels

Mistakes made?  = None, the trade set-up was there, it just did not work.  The Entry and Exit were perfectly executed too.

As you can see at close of business yesterday (Midnight UK time), the DTosc was still BULLISH, this is the risk of using an indicator, but I accept it’s downfalls and factor that into my trade plan.

End result was a losing trade/position, will I take the next trade that looks identical to this one?  You bet I will.

The key message here is that even the best looking trades for a quick profit can fail, this is the nature of this business – I base my DTosc Reversals on a 65% success rate, this was obviously one of the 35% that fail.

I’m now looking for the next set-up on the EURUSD, it’s going to be interesting watching price action following the DTosc Bearish reversal that should happen, the next Bullish reversal might be very interesting!

Hope it helps

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2 Comments

  1. Hello – great post. Interestingly, I am looking to short EURUSD based on Miners time projections. Have a look here for details of my thinking, see WHAT DO I THINK, on: http://wp.me/p2pjWs-3M.

    Would be interested in your views on how I have applied the measurements – I am in two minds – are we short term dip and a continuation of the bull or hitting a large scale a-b-c correction and heading South.

    I guess as ever, the answer is “yes, definitely one or the other! :)”

    Glen.

    Reply
  2. Hi Trader Glen,

    Like the post – yep you’ve applied analysis OK. The truth is we don’t know what’s going to happen until it’s been and gone. This is the quandry many traders find themselves in, by resorting to Elliott Wave analysis you are forcing an opinion of market direction, you will have a bias for direction based on using EW and therefore this can lead to uncertainty by market price action.

    I love the concept of EW – for me it would be the perfect trading partner, being precise on market action would suit my personality, but I spent years trying to make EW work and could’nt.

    I can see the potential ABC on the weekly and I can see the potential for a short-term correction on the daily.

    My play is to play the Daily charts and take what’s given, over time you’ll play the right side of the market regardless of what formation is taking place.

    The key for me now is to watch price action, Gann/Fib levels and momentum – but the very short-term at least is to the short side of the market, how far that goes we can only guess.

    Good Luck and thanks for the comment

    Reply

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