EUR/USD is consolidating with resistance above and support below.  The prevailing trend on the daily chart is up, but the medium term trend on the 4 hour chart is down, so I'm looking for a breakout in either direction and am straddling the pair with a buy order above the current price and a sell order below.

Check out the daily and 4 hour charts below...

Daily Chart:

4 Hour Chart:

Breakout Possibilities

We've got a down trendline on the 4 hour chart that has been tested several times in the past few days and held.  A break above this line would mean a resumption of the prevailing trend on the daily chart.

However, we've also got an area of support around 1.3830 that has been tested several times in the past.  Note that this is more of an area of support, rather than a specific level, as we've seen the pair react multiple times to each of the three horizontal dotted lines.  A break below this area would mean a continuation of the medium term trend.

I think a move that breaks in either direction could have some legs.

• Long Entry:  1.3996
• Initial Stoploss:  1.3799

• Short Entry:  1.3799
• Initial Stoploss:  1.3938

Update 1/5/09 6:33 AM:  The Euro broke down strongly through support overnight, so I'm currently short.  Since it's moved 1R in my direction, I've closed half of my position and move my stop on the other half to breakeven.  It's nice to start of the New Year with a win!

Tonight I've entered a long order on EUR/USD, which, if hit before midnight tomorrow, will be my last trade of 2008.  It's been a very rough December for me, but I hope to end it on a high note.

Let's take a look at this setup...

The Euro's been in an uptrend on the daily chart for all of December.  After hitting a high on December 17, the pair retraced back to the rising trendline, and now, on the 4 hour chart, we see a symmetrical triangle has formed.  I've placed long orders at 1.4165 - if the pair breaks out of the top of the triangle and resumes the uptrend, my orders will be filled and I'll jump on board.

• Long Entry: 1.4165
• Initial Stoploss: 1.3985

Edit 12/31/08 7:23 AM:  This morning I woke up to find that the pair broke out - but to the downside.  So my long orders weren't hit, and likely won't be hit today.  

After being flat for more about a week and a half (partly due to my poor start to the month and the need for a break, and partly due to the fact that many of the pairs I watch have been undergoing trend reversals, which may be at least partly to blame for my poor start), I've taken a position in the market tonight.

My poison of choice?  AUD/USD.

After breaking through the down trendline on the daily chart (indicated by the red line in the 4 hour chart below) and establishing a new swing high, the pair has pulled back to a rising trendline and formed a double bottom on the 4 hour.  Price appears to be respecting the rising trendline and double bottom, so I've entered a long order with the expectation that buyers will continue to push the pair up.

My intial stoploss is 10 pips below the double bottom, recent swing low, and rising trendline.  The markets will likely quiet down towards the middle of the week for Christmas, but I may get some good movement over the next couple of days and hope to move cash out half of my position at 1R and move my stop on the other half of my position to breakeven by Tuesday night.

• Long Entry: 0.6832
• Initial Stoploss: 0.6755

 

My EUR/USD anti-hedge short orders were hit, and then stopped out today, for a loss of 133 pips per order. 

I've been experimenting with the Jacko anti-hedge order for a few months now, and am reconsidering its place in my toolbox.  I know that many traders on Jacko's thread swear by it, but I've not had much luck with it.

I like the idea of getting back in the market in the direction of the trend after being stopped out and price starts moving back in my direction, but I'm not comfortable with blindly setting my entry at the price where I was stopped out and my initial stoploss such that I'm risking the same amount as on the original trade.

I would rather, after being stopped out for a loss, evaluate a possible re-entry based on the price action that has developed after being stopped out of my original position.  So this is how I think I'll proceed going forward, and we'll see how it works out.

A long opportunity may be shaping up on USD/CAD.  The pair is in an uptrend, and the daily chart shows the pair testing the rising trendline.  So far, it is respecting the trendline as support.

Also, note the area of resistance at 1.3000 that has been tested three times in the past three months.  If price moves up again, it'll be interesting to see how it behaves around this area.

I'm going to test the waters with a buy order just above today's high, with an initial stop below the rising trendline.  If the pair respects the trendline and takes out the current high on today's bar, I'll expect it to continue to move in my direction.  As always, though, I could be wrong!

• Long Order: 1.2620
• Initial Stoploss: 1.2437