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Trading notes 12/08/11
Today the EURUSD continued its decline off its recent pullback to test the
1.35788 crunchy and the middle of its falling channel. It is still just above
the lows formed after the break from the Summer consolidation so I will trim
the phase-4 short as we push into this next test below. On those phase-4
plays it is my experience that the first signals are the ones with the most
large trade potential and with this one being a second signal into a support
level the prudent play is to flatten while it sorts out the level. Hopefully
things will start to open up a little bit after this second test of the lows
I was in the room early today and only got to talk to a couple of you. The
only short-term trade I had came along right after I got there. It was the first
sell off the 25x MC and the 1.33533 crunchy. That is the fourth setup of the
Setups examples chart in the Bulletin of the trading room if you need it for
reference. The signal had fired prior to my arrival but given the time of day
it had not really gotten started yet so my late entry was about the same as
it would have been on the exact time of the signal. The market had jabbed
high through the test area in the pullback leading up to the signal so my
stop had to be a good bit beyond the crunchy to allow room for a second
test. Thankfully I used the proper stop despite the size because it did make
that second test before moving to target. With the proper stop in place I
was able to walk away and let the trade play out without having to think
about it. Had I used a closer stop inside that high I would not have been
able to walk away because I would have had to be around for re-entries
had the stop been hit. The initial trip to the target area did not fill my exit
but the second one did.
Its snowing here today and Christ-mas is coming up quick and we are all
busy but I hope to see you in the room next week, especially if you need
help. We can go over things step by step as needed and help you get
a good handle on things so you can start the new year off right. Refer to
the Bulletin in the room for a video on how to draw and use the levels as
well as more examples of the basic setups and let me know when you want
help.
God bless you ~
Here is the prior post.
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Watts Trading Group
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