EUR/USD Short Term Buy at 1.4783

Last updated 10/13/2009 7:37 PM EST (GMT -5) 8 Comments

Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of futures results.

Bradley W. Gareiss

Technical Analyst, GFT

I usually don't trade patterns this short term for a variety of reasons. The spread can become too big of a factor for risk:reward, news can more easily affect the trade, long bars can occur very quickly, etc. However, this trade on the EUR/USD is a good short term trade. First, the spread is very small compared to the magnitude of the pattern (AB is over 70 pips). Second, there is a very strong bullish channel.

The biggest concern here is that Retail Sales come out tomorrow (Wednesday- 10/14) at 8:30 am Eastern Time. FOMC also comes out later tomorrow. Do not enter this trade if it is about to enter right before the news is due to come out. If you are in the trade and the announcement is about to come out, I would likely exit. It is difficult to write about every scenario that could play out in such a small space, but you should be very careful around that announcement. Don't say I didn't warn you.

We are looking to buy the EUR/USD if it falls to 1.4783 (Point D). Point D is located at the convergence of the following points:

We will go into possible scenarios that could invalidate the trade. If there are long bars near the completion of the CD leg, we will not take the trade. Also, if the pair comes within 8 pips of reaching our entry, does not enter, and reaches T1 before entering, the trade is invalid. The trade is also invalid if the pair rises above 1.4868 before hitting our entry.

To recap, we will look to buy the EUR/USD at 1.4783 with our stop placed at 1.4766. Our initial profit targets are 1.4809 (38.2% of CD) and 1.4830 (61.8% of CD).

• • 
    
  • Daily Chart - Bullish channel.
  • 
    
  • 15min Chart - Bullish Gartley; buy at 1.4783.

Comments (8)

Sana

October 14, 2009 at 12:55 PM ET

hi brad.....
just want to confirm,,,,USD/JPY trade's stop hit at 88.82....but u put here as a profit...just concern that if u guyz get 56 pips howcome my stop order hit ...pls confirm. Thanks....

bgareiss

October 14, 2009 at 02:12 PM ET

With GFT, the low was 88.83. Are you using a different platform? Also, I wouldn't have taken this trade anyway because of the long bars in the CD leg. However, we have to put it on the "closed trades" list to be transparent (otherwise we could pick and choose after the fact). I will most likely write about this in more detail later today. Brad

Sana

October 14, 2009 at 04:34 PM ET

hi brad,,,

Nuz/usd has already cross 74.21..and went up to 74.35.....so is this trade valid or invalid can u pls confirm that.

Thanks.

bgareiss

October 14, 2009 at 04:36 PM ET

Yes, that trade is now invalid. Brad

fx-naija

October 14, 2009 at 03:53 PM ET

Hi brad,

I saw ur post on possible CHFJPY bearish gartley trade earlier and surprised not to see it listed again. not even in invalidated trades.

could u explain the reason for that

Mike

bgareiss

October 14, 2009 at 03:59 PM ET

I believe you are referring to the CHF/JPY bearish Gartley where we sold at 89.14. It is listed under the closed trades (opened 9/17 and closed 9/25) on our Trade Recommendations tracker found at FX360.com. The trade wound up hitting both profit targets. That original article was written on 9/17 and we also had a follow up to move the stop after we had entered the trade on 9/24. Brad

pp22

October 14, 2009 at 04:46 PM ET

No I think hes talking about Roger`s CHF/JPY sell at 88.41 that is not listed in the recomended trades or in the invalidated trades. But if you go to full listings you can see the article where suggests it.

bgareiss

October 14, 2009 at 05:05 PM ET

If the question is regarding Roger's trade, I am not sure what happened. I would leave a comment for him on that article. Brad

Add Your Comment

Please login to post a comment or sign up for an FX360® account.

Loading...