Too many times in the past few months have I thought "pair ABC looks like it may break the trendline and really take off" or "we could see pair XYZ bounce nicely off of that trendline and move in the opposite direction", only to come back in the morning or after work and find that the pair did in fact move as I had anticipated and I had missed a large portion of the move.

Of course, this is the risk I run trading longer timeframes and choosing to sleep and go to work every now and then.  I accept the fact that I will miss good setups from time to time, but I think I can do a better job of catching some of the moves.

Tonight, I see another possible move shaping up on EUR/GBP, but this time I will be prepared.  Check out the daily chart of this pair below.  After a nice uptrend that lasted several months, we saw a lower high in late January, followed by a trendline break last week.  I missed the opportunity to short the trendline break.

Over the past day or so following the trendline break, the pair has retraced significantly, presenting another possible short opportunity.  If we zoom in to the 4 hour chart, shown below, we see that the pair is approaching the falling trendline.  Rather than wait for a bounce, I'm going to be proactive and anticipate a bounce off of the trendline by entering a short order just below near-term support around 0.8980.

So, if the pair bounces and moves south, I'll catch the train.  My initial stoploss will be just above near-term resistance and above the falling trendline.  We'll see what happens.

• Short Entry:  0.8980
• Initial Stoploss:  0.9087

Edit 2/5/09 8:15 AM:  My short order was hit yesterday and the pair made a nice move in my direction, stalled a bit, and is now continuing its move south.  I took profit on half of my position at 0.8863 for a profit of 117 pips (just over 1R).  I'm letting the other half of my position ride until the trend turns around.

Edit 2/10/09 10:55 AM:  The second half of my position was closed this morning as the pair rallied above resistance where my stoploss was placed.  Out on the second half at 0.87821 for a profit of 197.9 pips.