06 Jan – EURUSD – Short

6 thg 1, 2016

As expected EURUSD found a top around 1.0950 area and made a substantial move down. After consolidation between 1.0940-1.0900, the pair finally broke to the downside.
The long term view remains short. The price should resume its downtrend from now onward.
After making new lows, the price retraced towards former support and now resistance .

The pair is trading below 21 and 55 moving average, which indicates an aggressive bearishness. Given the oversold stochastic, we should see some correction move up, which is now taking place.
This is an opportunity to sell EURUSD or add to existing short positions.
The long term view remains short.

As we don’t know how large the correction will be but I can choose few points of entry.

I have identified two points of resistance and divided the position in two:
The first goes in @ 1.0785 at most recent resistance
Second @ 1.0850 – Deeper correction might be in play.

I chose to discount stochastic being oversold as I expect it to catch up with the price action, which takes priority over lagging indicators.

Date: 01/06/2016
Pair: EURUSD
Price: 1.0780
Trade: Sell Limit
Lot Size: 0.01
Stop Loss in Pips: 120
Take profit in pips: 250
Risk of Equity: 1%

My Trading Checklist

ARE THERE MAJOR RISK EVENTS TODAY/THIS WEEK: No
Is the market risk off or on? SP500, DAX, NIKKEI. Are the down or up: Risk Off
Is this trade with the trend?: Yes
Did I see it yesterday?: Yes
Is this a pullback measured by Fibs?: Yes
Am I buying support?: N/A
Am I selling resistance?: Yes
Is this entered during London’s session?: No
Did the price pulled back from 200MA on 15Min?: Im trading anyway
Are stochs extreme on multi charts?: No
Where is the price in terms of Pivots Points?: Resistance