Today’s early EUR action provided the first opportunity to detail a short setup since I began the Dipper posts. And, once again, the setup delivers a nice little wake up treat.
Reviewing the chart we note the SMA(8) is down slope prior to 3:00 and at 3:00 the parabolics have already fired a SELL. The 8/8 hi/lo channel hasn’t been violated to the downside yet so nervous traders may want to delay entry until that final confirmation. For those of faith the entry point is 1.2793 at 3:00.
We then get a real tumble over the next 30 minutes, retracing (but not closing) to 1.2748. The low close was 1.2752, which counts as the start of our 15 pip trailing stop. As luck would have it price then jumps to 1.2769 and closes at 1.2768. There’s the 15 pip stop and by the time the COVER order is executed price is back down to 1.2765. Net gain for the trade = 28 pips over the course of 50 minutes.
Had we let the Dipper run to expiration at 8:00 we could have added another 6-8 pips but the 4 hour added ride was full of whip saws and 2 other instances of >15 pip trailing stop hits so, lesson learned, best to just stick with the plan.
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