Forex Traders Experience Misplaced Market Chaos: Dollar Bulls Get Crushed
Written by Britt Maras on June 23, 2009 – 4:04 pm -EUR/USD Outpaces Liquidity in Suspect Bull March against Worldwide Risk Aversion
Today I issued two different bear Trade Alerts each stopped out for a combined net loss of 49 pips. Last week I mentioned that a losing trade (s) is nowhere near as fun as the positive 22.1% return delivered in my Forex Signal Market Timing Trade Room last week (based on trading 5% margin or less). Today is rather fascinating in terms of price action but more apparent is the bull march to some destination that I am certain not even the liquidity providers recognize with any reasoning whatsoever.
Certainly I must be wrong! Even a very good technician is wrong but he continually strives to make sure his profit-to-loss ratio remains near or above 2:1; thus the very tight stops in a rather suspicious market environment. Of course, there is always another trade and it must be traded and the setup must be trusted. That’s the reality required for success in the Forex Market.
Now, let’s get a few things straight! I could care less about liquidity providers and, as to why and how movements like this occur; that’s not as important as preparing for the next trade. Today’s activity in the FX arena is surely suspect but that’s the part of the movie we talk about when exiting the theater and indeed – that’s what makes a good movie.
It’s not the performance we get consumed with it’s the ending and then the next scene. The past 5 summers I don’t exactly recall 1hr chart patterns as we have witnessed the past few weeks but I do recall that in summer trade often we have plenty of tsunami type trades and plenty of whipsawing; and plenty of profit available – as seen last week. All is good in Love and War!
Sometimes market activity like today is followed by some strange news event, some fundamental news or some sleeping/ticking/time-bomb that when we learn about it – we think, okay, someone knew something! Right? Not really! Okay, Back-to-the-Future. Let’s get ready to make a bunch of pips.
EUR/USD Levels to focus on:
Resistances: immediate at 1.4120, 4155-63, 1.4184, 1.4240, 4284 and then 1.4310
Supports: immediate at 1.4068, 4049, 1.4007, 1.3986, 3966 and then 1.3904
The pair is pining for exhaustion but not likely before rising further to some key resistance. There remains potential for a bull entry and it may take more time to pass before a solid bear entry appears. Needless to say, stay tuned and we will remain focused and prepared to attempt another entry balanced with risk versus reward.
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Britt Maras – Senior Currency Strategist
Tags: forex market, forex signal, Forex Trader, market timing
Posted in Forex Market Updates |