Sunday, May 3, 2009

Trading Plan for Next Week


One pattern that seems valid for trading so far, on the USD\JPY. Note the clean ascending channel, which price respected (touched and bounced) for seven times - indicating a strong channel. Price also stopped on resistance three times, which increase the probability of a breakout down.

Price was closed exactly at the support of the channel, which can lead to a gap at the opening BELOW the channel. If a pullback to the support trendline will occur I will enter short. Note that I won't enter if price breaks the upper trendline, even if it pulls back.

The size of the channel is 55 pips, and this is the projected target for the signal. Respect the stop-loss when calculating Risk:Reward ratio. If Stop Loss is more than 15-20 pips, I will consider the formation unworthy.


Another channel pattern, in the EUR\USD pair. The upper trendline is a bit messy, but the support trend line (the lower trendline) is very strong and has been respected 6 times. The price stopped again on the support implying a gap on the opening. Channel size for this setup is 55 pips - meaning that the target projected is 55 pips from the pullback.

This is what I see currently, as the week starts and oppurtunities emerge I will update.
Good trading!

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