Counter Trend Forex Day Trade EUR/USD 29/07/2011
Friday we only took one trade in the trading room. Unfortunately when the EUR/USD and the GBP/USD took off to the upside rather abruptly following the negative GDP forex news out of the US. Initially the GBP/USD and the EUR/USD spiked down towards USD strength following a negative number. When I saw this I decided the safest option was to wait. While this kept us from taking a hit it also kept us out of the move up.
We stayed patient though and finally got a day trading setup a little while later. The market ran 150 pips to the upside with really no retracement. We had resistance levels marked on the way up, but the market kept running through cleanly without giving any signs of reversal. Finally the EUR/USD gave us our classic forex volume entry short and we managed +20 on the first half of this trade with the last half getting closed at break even. It gave up about 40 points before turning back up. Overall a decent day trade. It’s important when taking counter trend trades to take some of the position off rather quickly. By doing so you insure some profit even if the market does eventually turn against you. This is exactly what happened here.
Overall last week we took 9 trades with the new volume based forex system. 6 trades were profitable, 1 was break even, and 2 were losers. As time progresses our risk/reward ratio will be tweaked to maximize profits for this entry. With a win/loss ratio as described above it’s hard to lose money. This is also comparable to our live forward testing results as well as our back testing results on the new forex strategy.