I’ve mentioned these bracket or straddle setups previously and try to post a couple daily in real time in the chat room. Given the usual dynamics of the EUR lately last night’s price action offered what appeared to be an attractive risk/reward for such a play.
From the close of the US equities market on Tuesday and through the entire Asian session (12 hours) the EUR remained in a 26 pip channel. We don’t have to revisit the coiled snake concept but, given the uber-volatility profiled in yesterday’s post, the expectation was for something to give . . and possibly in a big way. We therefore set our entry triggers 15 pips above the channel (BUY) or below the channel (SELL) , place 15 pip limit stops and a 10 pip trailing stop on each side and then go to bed.
What transpired thereafter was a picture perfect scoop and poop (as opposed to the dreaded poop and scoop) that produced a clean little 15 pip return over 30 minutes. The EUR Dipper also picked up 11 pips in the first 25 minutes before being closed by the trailing stop for a total overnight gain of 26 pips.
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