In the above eur/jpy trade, the price did break below the red line to 156.68
for about 35 pips profit, then shot up over 180 pips in 3 hours.
Although the trade was easily profitable, the 180 pip rally could have
turned this trade into a loser because of the upside momentun of the euro.
In other words, think about the directional momentum of the base currency
as to whether the trade you're taking is with the trend or counter trend.
Here's something you newbie's should find interesting.
http://www.investopedia.com/articles...topHunting.asp
for about 35 pips profit, then shot up over 180 pips in 3 hours.
Although the trade was easily profitable, the 180 pip rally could have
turned this trade into a loser because of the upside momentun of the euro.
In other words, think about the directional momentum of the base currency
as to whether the trade you're taking is with the trend or counter trend.
Here's something you newbie's should find interesting.
http://www.investopedia.com/articles...topHunting.asp