2 March 2010

2 March 2010

Morning Guys,

So some very nice moves yesterday on both the Euro and GBP making for a great start to the month.Keeping with the same method of trading I'm looking at align market action with price action.Using the 60 min chart to gage what market action is doing I have marked off the previous swing and high and swing low and I'll be waiting for a break of either one. Due to size of this range it is a fairly unlikely that I will see a valid breakout trade today. However I will be looking to scalp the range. Essentially the swing high and low are areas of support and resistance. So if price reaches either extreme and turns around then there is full grounds to trade the bounce and I'll use price action to determine the entry if this happens.

The same set up applies for the GBP except the range is even larger.

I fully appreciate that the range of this trade is around 400 ticks and that it could take a while for that range to break or even provide a valid trade however thats the trade plan for this particular method and therefor I'll stick to it. You don't have to run this on a 60 min chart you can drop down to a lower time frame and trade it. There are a few other threads on here that go through a 15 minute break out plan which obviously is going to give you more setups throughout the day. For me on a GBP trade like this I mark off the points on my chart and then move onto something else. That way if a trade setsup I get a little alert and I'm not sat around all day / week waiting and watching every tick.

09:50

Ok sooo its the third time in a about a week that i have missed another Euro scalp (different trade setup) due to being away from the desk very very very annoying!! but shrug it off and onto the next opportunity.so Euro at the base of its range, and even though it hasn't touched, it is close enough for me to drop to a lower time frame. I am now looking to see if price breaks through or if it reverses and the support level holds.

As I was typing this Euro has broken out, and had a little go at pushing down.

I took the break out low -2 and round down in the usual way giving me an entry of 1.3430 which as we can see didn't trigger and price has now retraced back into its range. On the back of that there was a little reverse pattern as price broke a previous swing high. Now even though price broke out of the range I had marked due to the fact that no short trade was triggered I am going to still take the range as valid. Which also means that the reversal trade at the base of the range is valid.

Entry is above the break of a previous swing high (pink circle) 1.3480 and the stop is at the pullback 1.3460 (second red line) which coincidentally is the base of the range we had marked out. As this is a range scalp I want to get the risk off as soon as possible so my scale out is going to be at 1.3490 (green line) which for me has just filled so the trade is now risk free and running so lets hope I can ride it all the way to the top of the range.

13:24

Stop moved again on the Euro trade and its looking like it might run out of steam.

Back to waiting for now.

14:10

Euro stop moved again on the break of a previous swing low to 1.3580 and stopped out pretty much straight after

100 ticks on the last 3rd of the trade and 10 ticks on the other 2/3rds (20 ticks to one lot) So overall 120 tick trade to one lot. Not bad for what started out as a little range scalp. Took a little bit of luck on the way with some Greece news which I reckon ran things an extra 30 - 40 ticks up for me but still stuck to the plan and it paid so happy days.

Pozzy