EURUSD WEAK BUT IN A MAJOR SUPPORT ZONE NEED STRUCTURE FOR LONG

21 Agu 2014

EURUSD: It is clear short term momentum is bearish. The 1.3300 level has been compromised and at the moment there is no sign of strength returning to this market. That is FOR THE MOMENT. Things change and I recognize price is now entering a broader support zone that is based on the 1.3100 historical support that dates back to October of 2013. As a day trader, I am not opposed to low expectation shorts in such an area as long as the proper criteria is met. The main thing to be aware of is that this is a major support zone and it is reasonable to anticipate a bullish reversal in such an area. In this case, I want to see a price structure in addition to my validation criteria being met, Price structure is a double bottom for example. Obviously this can take a week or more to form on a 4 hour time frame.

On a swing trade basis, I will be waiting for price structure and validation in order to go long. Since some important supports have been compromised, I will look to exit at a conservative target in the 1.3500 area. If the trade is working well and my holding criteria is met, I may hold some for a second target of 1.3670 area.

As far as risk, before I can determine that, I need price structure, There is none at the moment, but for now I will consider the 1.3100 are as a reference point. A close with conviction below that price will cancel out my long scenario.

Anyone can put on a trade and produce a profitable outcome. The question is can you produce a profitable outcome consistently? You need more than a system for that, you need a thought framework. To learn more about what it takes to be consistent, check out this article I wrote: unconventionaltrader.com/321