Hanging on by my Fingertips

Ok…so this is the longest I have had a position open ever.  I have 6 shorts in the market right now for an average price of 2680, the stop is @ 2600 – this means I have 80 pips lock in.  This doesn’t sound like much, but that’s because I’ve added to my position as price moved in my favor.  I have nothing risked (b/c of locked in pips) and a total position size 4x’s larger than I would if I was working on a new trade, calculating risk and money management.

I have a goal of 2% per day on my account balance.  As the market moved in my favor, each day, I locked in the required amount of pips to satisfy the 2%.  Right now, if tomorrow comes and price hasn’t moved down more I won’t be able to do that and will close my position until the market decides which way it wants to go.

Now, I have my opinions about which way I THINK it will go, but it truly could go either way.  Here is the set up, I’m going to try to walk myself through it and you can let me know how you feel about it.

-Overall trend is down – this sets me up to look primarily for short opportunities.

-we experienced a large gap down from last week to this week – which did not get closed.  This says to me that the market couldn’t wait to drop and never look back.

-after the gap we consolidated – this says to me that short term traders where looking for some quick pips on longs from the dead cat bounce (also the NY session on holiday didn’t help either).

-During the Asian Session we saw a VERY quick 100 pip drop then a slow trickle down to 2600 into the Euro session when we had a small correction up to 2680

-Since then, we have bounced between 2500 and 2650…

Ok, so with all of that said (purely price action, no technical indicators), price is now consolidating.  This can mean one of two things – 1. it’s consolidating in order to take a breather before it continues down or 2. it is starting to correct and will move higher (probably to 2800 – this is where the 50% fib is from the last significant high to the new low it made today) before the trend resumes.  I am leaning towards the latter, but this means my trades will be closed and I will be on the sidelines until this happens or some new ideas come to light.

I would just like to note that it feels as if the Wizard of OZ is pushing the levers and moving the market from behind a curtain.  Something just seems arye – to many movements down, every reason to bounce up but it won’t…

I’d love to hear your thoughts while I pop a bottle of bubbly to celebrate my first 1000 visitors!!

Advertisements

2 thoughts on “Hanging on by my Fingertips

  1. Double bottom at 125.30 intraday looks tentatively bullish; but heavy I think. Looks like our primary point-of-reference here is the close back on 11/19 at 1.2460. Prior to that, the 11/11 close at ~1.2490 is important. Both of those real bodies were engulfed the following day, the former of which began the rally back to the 140s. Resistance on the round numbers at 1.26 and 1.2650. I’m undecided here so I’ll be sitting the pair out until the ambiguity is gone.

    Certainly things aren’t looking up for EUR as the mess of detail concerning Eastern European exposure continues to be released, etc., so if there were a point of breakdown under 1.24-1.25, I think it’s fast approaching. There’s nothing like some fundamental nonsense to gum up price, and we’re getting plenty of it lately.

  2. Wow, I completely missed that double bottom. Now that I see that, I am approaching with more caution. I currently have an order in @ 2800 but I’ll see what price is doing as it approaches to see if I will let it get filled.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s