Play of the Week
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UPDATE 7/25/10: This trade was stopped out early in the week for -80.
The daily trend is still bearish defined by lower highs and lower lows. Presently the bearish momentum on this time frame has stalled and the pair has been range-bound since the beginning of June (107.50 – 113.30). After examining the details on a 4-hour chart, the pair looks like it has reached the high of this larger range and has been consolidating further into a minor range (111.40 – 113.90) . There is a short set-up that can trigger a move back to the middle if not the bottom of the larger range. Look to short this pair if 111.80 is broken. If this trade is not working, you should exit at 112.63. Thats a risk of 83 pips for a possible reward of atleast 130 pips and if the bearish momentum really kicks in, it is possible to retest the major range lows which is over 400 pips lower.
Note: KNOW THIS PAIR. IT IS MUCH MORE VOLATILE THAN A MAJOR LIKE EUR/USD. IF YOU ARE NOT COMFORTABLE WITH THE RISK OR VOLATILITY, TRADE SMALL POSITIONS OR ON PRACTICE ACCOUNT.
Play of the Week:
I am looking to go short at: 111.80
If filled, my protective stop is 112.63
My profit target is 110.50
Risk = 83 pips Reward = 130 pips
Chief Executive Manager
RISK WARNING: Off-exchange foreign currency trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with off-exchange foreign currency trading and seek advice from an independent financial advisor if you have any doubts.