Above you can see that at this point, it is hard to make the case for a new bullish trend, unless the EUR/USD makes a new low first. The clear 3-wave abc pattern is bearish, and price has broken the supporting trendline. Having said that, the market is very good at shaking people out of their positions, so this may have been a mistake. But still, the best strategy is to wait for a confirmed trend and trade a pullback, not try to call a bottom.
8/24/2008
Trade # 15: EUR/USD Long (Update)
I last posted about this trade here. I closed out the position for +58 pips after the pair broke through the supporting trendline. It now seems pretty hard to argue that a bull-trend is starting, so I am taking the profit while it exists. If the pair makes a marginal new low and then sharply reverses, I will wait for a 5-wave rally before going long again. I am afraid to go short at this point based on the risk/reward ratio.
Above you can see that at this point, it is hard to make the case for a new bullish trend, unless the EUR/USD makes a new low first. The clear 3-wave abc pattern is bearish, and price has broken the supporting trendline. Having said that, the market is very good at shaking people out of their positions, so this may have been a mistake. But still, the best strategy is to wait for a confirmed trend and trade a pullback, not try to call a bottom.
Above you can see that at this point, it is hard to make the case for a new bullish trend, unless the EUR/USD makes a new low first. The clear 3-wave abc pattern is bearish, and price has broken the supporting trendline. Having said that, the market is very good at shaking people out of their positions, so this may have been a mistake. But still, the best strategy is to wait for a confirmed trend and trade a pullback, not try to call a bottom.
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