“Sometimes you make the right decision, sometimes you make the decision right.” — Dr Phil

I’m not sure if that applies to the market. In regards to being right in trading, there are really only two options. You can be right in executing and managing a trade, or you can be right just in the management of the trade. All other options don’t matter.

In being right in the execution and management, you should make money in the long run. Here, you not only enter right, but manage your risk and have realistic goals.

LEARN HOW TO STAY IN THE GAME

On the other hand, we are all occasionally wrong in the entry. So if we seek longevity in this game, we must correct those trades by being right in the management side. It’s ok to be wrong on direction from time to time, but it’s not ok to compound that with bad money management and no trade plan.

In effect, even when you’re wrong, you have to make the situation as right as you can.

EURO/DOLLAR ACTION

That brings us to the euro. Last week, we almost called a bottom on Monday where I urged caution in buying or selling a 600 pip selloff especially on the levels we were coming up on. This week isn’t as straightforward. Price last week spiked up to the 0.618 Fibonacci consolidation of the entire prior swing move lower. Price is now between the goal posts (to borrow another metaphor from Greg Michalowski’s book).

DRILLING DOWN

The four-hour chart seems the best way to view the euro chart. On the short side, we are supported by the 100 bar moving average, and on the long side, the 200-bar moving average and the .5 and .618 Fibonacci retracements should offer resistance.

BE NIMBLE

Forex moves can be tricky. Sometimes a sharp directional move like what we saw last Thursday is an indicator of a trend reversal and sometimes it’s just a dynamic correction.

SUMMER DOLDRUMS

Remember, we are entering or possibly have entered the summer doldrums. It might be time to start looking for shorter term trades off levels rather than long trending movements. Either way—watch for breaks or bounces off those levels mentioned above early this week.