Intra-day Trend Continutation Short On The EUR/USD 6/1/2011
By Thursday the market had already established an aggressive trend to the downside in the EUR/USD. Going into the Thursday morning’s NY session because of the already established trend it was a fairly straight forward trade but it required some patience. We knew that we wanted to get short with the trend but we needed some type of retracement into resistance before taking a short position on the Euro.
After a few hours of waiting the EUR/USD retraced perfectly into the 60 EMA as it had been doing the entire trend. Once it retraced up into the EMA it formed a nice reversal candle and then the candle following the reversal candle was a clear confirmation candle that closed lower than the reversal candle’s body. The confirmation entry forex trading strategy is something that takes patience to wait for. Using a 15M chart you have to wait for the reversal candle to form and close as well as let the confirmation candle close. That alone takes 30 minutes. However by doing so you now have a forex trade setup with clear confirmation and a great risk/reward.
On this trade setup the reversal candle closed and then the next candle closed which was our confirmation candle for a trade down. When the candle after the confirmation candle pulled back into the body of the reversal candle we went short. On the first half of the trade we took +20 pips and then on the last half of the trade we took +90 pips. Overall a pretty nice trade.