Following the weak trends on Monday, most major pairings were still indecisive. The Euro experienced a short term trend reversal against both USD and JPY. UK's pending release of borrowing figures made investors even more unsure. In the end, it sparked a dip in the British Pound. A good day to avoid the GBP.
Disclaimer: This is purely for sharing purpose only, not a trading advice or instruction.
Trade: Buy on uptrend pullback near trendline. Prices moved
against trade. Average down after spotting doji and reversal signal for upside
pullback. Got out near previous support/resistance level of 1.3653 with a
slight profit.
Review: New low breaking previous low signals a trend
reversal from up to downtrend. A way to close the trade would be to cut loss at
first break of previous low. However, a doji and a minor reversal signal was
seen, thus I averaged down the trade to close all positions at pullback to
minimise losses. Since previous support is at 1.3653, pullback resistance
should be around the same level, thus all positions were closed there.
Trade: Sell on downtrend pullback after downward kicker
signal.
Review: Trend reversal from up to downtrend, seen by lower
trough and lower peak. Sell and got out within 3 bars. Profit 5
pips.
Summary
5 min charts today were no trending obviously, therefore 15 min charts were used to see the clearer picture. In times of a trend reversal during an open position, there are 2 options. Cut loss immediately after break out, or average up/down positions and minimize loss at first pullback (see first trade on top). Averaging up/down is riskier. I only do it when I see signs of a strong pullback.
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