Sorry, this is a little bit late, its been a crazy weekend. Friday morning I traded the EUR/USD a little bit from the short side and did okay, so I'll go through what I did and what I could have done better.
The EUR/USD caught my eye Friday night for a number of reasons. One, it was trading up near 1.4250, which is around the high for the past few months. Another reason is because of Portugal's economic troubles. The nation was teetering on the edge of needing bailout, and a new austerity plan was just rejected. A bailout request from Portugal would spell trouble for the euro, and I knew that it would be in play for Friday morning. Also, some fourth quarter US GDP stuff was coming out in the morning.
Preparation:
I sat down Thursday night and Friday morning to study the EUR/USD chart as well as the dollar index. I identified the 1.4150-1.4140 region as an important level to determine how the pair would trade for the rest of the day. It had provided previous short term and long term support, so I was thinking that a lot of traders would be looking at this level.
Plan:
After finding this level, I came up with my if/then statements
If the pair drops support @ 1.4150-1.4140, then I'm getting short 1 lot with my target near 1.4075 and looking to add beyond that price
If support holds @ 1.4150-1.4140, then I'll do nothing.
-I wasn't expecting this to happen, so if it did I wouldn't have felt comfortable getting into it until it got above 1.4250.
It just so happened that the 1.4140 level broke, so I got short from 1.4135 1 lot.
Patience and Discipline:
The trade immediately went for me, and I always get tempted to take profits too early. I showed patience by not taking profits, and I also didn't panic and close my position when this initial profit disappeared and the pair rallied a little bit (this may have been due to the positive US GDP release). I need to continue to work on this, because its one of the biggest problems I have.
Hard Work:
I did plenty of reading and research before I placed this trade, so I felt well prepared and in a position to make a good trade.
Communication:
I tweeted my idea Friday morning, and I'm sharing the details of my trade right now in this blog.
This was a profitable trade for me, but I did close my position be fore the majority of the move. I always expect things to happen faster than the actually do, so I need to focus on just setting a stop and letting things unfold on a trade like this instead of staring at every tick. The EUR/USD eventually made it down to 1.4054, so my target would've been easily hit if I would've gave it more time. It's good though, this blog is helping me become more and more aware of that issue and I've been letting things trade longer. I want to continue getting better in the coming weeks.
Okay, I'm definitely going to be watching the EUR/USD throughout this coming week. We're toying around near a longer term level, and there's plenty of fundamental fuel right now to push this pair around. Specifically watch out for eurozone CPI on Tuesday, eurozone unemployment Thursday, and US NFP/unemployment/manufacturing on Friday.
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