We left off yesterday morning at the yellow vertical time line with a forecast for a short term bullish move. This turned out to the the case as evidenced by the black arrow entry and exits although the gain was only a modest 14 pips.
The current EUR Trak has price at the top of the TRAK channel and the odds here favor a pullback to the lower channel band. The odds of such a pullback increase exponentially once price crosses over the channel mean. Unfortunately, the downside of waiting for this increase in probability comes at the expense of net return . . and the only way to compensate for this diminished return is to increase your lot size.
One important aspect of the Knock is that prices may only be marginally higher (or lower) once the Knock has completed a band to band trip. This is both a function of the slope of the EUR Trak and the time it takes for the Knock to complete. The 11:15-12:45 Knock after the yellow line took 90 minutes and generated 14 pips. The previous Knock from 9:15 – 10:30 took only 75 minutes but generated 60 pips. The dramatic differential, of course, was accomplished by trading in the direction of the EUR Trak. A bullish example of this exaggerated return can be seen by looking at today’s pullback Knock from 4:45 – 6:15 that yielded 30 pips versus the trend Knock from 6:30 to 7:30 that yielded 75 pips.
Also, under the category of ” I told you so”, the EUR once again slid over the LEDGE, this time to the upside, so you know what’s likely coming next.
Related posts:
