The market has become very bullish, as it broke the 1.3900 level, and is heading towards the 1.4000 price. On the 4 hour chart, the resistance level of the downtrending channel has been broken:

GMT 05:52 – Prices have just broken yesterday’s high as well as the the 1.4000 level (but the candle is not yet closed). I will be looking for a slight retracement before entering a buy trade.

GMT 06:21 – I have just entered into a buy trade. I missed out on a better price because I went to make myself a sandwich (note to self: no eating when waiting to enter into a trade!!!)

This is going to be a longer term trade, and although I usually don’t take such trades on Fridays, I’m pretty convinced that the market is going up today.

Long @ 1.4002
SL @ 1.3937
PT @ 1.4049 (first target),  and if the candlestick action shows that prices can go higher, I’ll hang on to the trade.

GMT 11:36 – I’ve just come back from a nice swim, and am happy to see that prices have shot up about 100 pips in the past 4 hours. I have just placed a protective stop at 1.4085 (15 pips below 1.4100). I will be closing this trade by the end of the day.

GMT 12:18 – Manually exited the position at 1.4103. (+101 pips).

This is a good close to the trading week.

Yesterday, I manually closed 2 of my positions for a +25 pip profit. That’s the “good” news.

The bad news is that after a short retracement upwards, I watched helplessly (sob!) as prices tumbled all the way down to my profit target:

Such is the life of a Forex trader… sometimes you have no choice but to sit and watch as the price eventually moves in your direction. However, I would still consider this a good trade because I exited the trade immediately when prices threatened to move up shortly after entry – and move up, it did. Prices continued to spike up (you can see the weird-looking doji in the chart above), and would have stopped out both positions if I had not exited them earlier.

It just irks me to no end that I missed out on such a nice down move. Ah well, there’s a better trade just around the corner.

As you can see from the chart, prices have settled nicely on the 50% fibonacci level (from 20 May low – 22 May high), as well as the 38.2% fibonacci level (from 18 May low – 22 May high). This is an area of strong support, so I wouldn’t be surprised if I see prices bouncing up from here.

GMT 05:00 – Prices have bounced off the 1.3800 level. It might go up as high as 1.3900, but I’d prefer to stay out for now. The 4 hour and 1 hour chart both show a downtrend, so I’ll probably wait for prices to move up more, and wait for a sell signal later.

GMT 13:00 - Price has indeed been bouncing off the 1.3900 level (1 pip less). I’ll wait to see if it breaks this level and then look for a place to go short.

Yesterday was an interesting day for the Euro. I had expected a sizable retracement sometime this week, and thought that Tuesday indicated the beginning of the retracement.

However, prices only managed to drop to a low of 1.3858 before shooting right back up again. It seems that the overall bullish sentiment for this pair is rather strong:

However, prices are still very high at the moment, as we are approaching the high of this year (the yearly high was last Friday at 1.4049).

The bulls and bears will be fighting fiercely this week, so I’ll just sit aside for now.

GMT 05.55 – Candlestick action shows that prices are likely to keep falling. I just entered short.

Short @ 1.3943
SL @ 1.3993 (50 pips)
PT @ 1.3815 (128 pips)

This is a counter trend trade, so it’s a risker trade.

GMT 07:28 – Prices are moving down steadily, and have just made a retracement past my first entry price. This is a good opportunity to get in on the same trade at a better price:

Short @ 1.3962
SL @ 1.3992 (30 pips)
PT @ 1.3815 (147 pips)

Note: this is a something new traders shouldn’t attempt: opening a new position when the current on is at an unrealized loss. The reason why I opened this second trade is because the recent price movements have convinced me that a larger downward move is coming up. Of course, I could be wrong – that’s what the stop loss is for.  :-)

GMT 13:00 – I see a piercing line reversal pattern on the 1 hour chart, which makes me a little uneasy, considering it’s happening so early into the retracement. I’m going to just close out my positions for a small gain rather than risk a full reversal.

Both positions have been closed at 1.3940  (+ 25 pips total)