What do you experts think of this trade?

Hi traders.

I posted a current chart for EU from a demo account.

The question is kind of tricky. The trade is obvious. Are obvious trades bad or good??

Would you take this short ?? Is trading that easy ?? Or the opposite will happen and the EU will move up against the obvious??

http://img249.imageshack.us/img249/3889/eushort.png

i will wait a little more, then sell for some profit. Yes, trading can be that easy. Anyway, i will also put a stop loss on the trade.

btw, i'm not an expert

No problem , all opinions are welcome. Thank you.

There's nothing wrong with taking obvious trades!

But is it really that obvious? Price also bounced off 50% (1.2171) of that whole up-move (1.1875 1.2467), maybe it's a long.

Personally I would wait for a break below the previous low at 1.2151 to go short but then the stop would obviously be wider, that's the trade off.


I'm no expert, I'm just trading the odds and probabilities like everyone else!

EU short didn't work! I expected that , very frustrating although it is demo.

Will this work ??

http://i48.tinypic.com/1z48lxv.jpg

Even more precise bounce of the daily 62% FIB ??

Demo or not it doesn't matter, but to learn something from it you might want to analyse why it didn't work before shooting off to another pair.

Why were you looking for a short, was there some bias there apart from technical?

If you're trading Fibs then why wasn't the 50% retrace at 1.2171 a long?

Why wasn't the breakout above 1.2304 a long?

Lots of opportunities there, with higher probabilities, no?

Don't get me wrong I'm not finding fault, I'm just throwing out a few questions which you might/might not have asked yourself already!

You were correct about bouncing from the 50%. If I looked correctly , the momentum was bullish. The NZD/UD long is similar and the long I took is working great.

Thank You Pipmutt.

CONFLUENCE-

When you are analysing trades and preparing to execute a trade the more ticked boxes you have the better off you are. Just having a fib study on your chart means nothing. I am not a fib fan purely because it is truly a misused and discretionary tool. Misused because most put it in there to suit a subconscious bias and discretionary because the interpretation from so many individuals differs in both its application (where and how it is drawn) and therefore in the results.

Does that mean you shouldnt use it. Not at all but if you are then you need to include more to the analysis. Combining comfirming signals (confluence) with help with making decision. The more you have the better the probable outcome. Some things to look for are Hortizontal support/resistance and whether past turning points line up with any fib lines drawn, trendlines, Divergence (if you use relavent indicators), whole numbers and Price Action. So unless I get something that looks to have more odds then I leave it alone. Sometimes this will mean missing trades, too bad.

So in looking at charts where you ask yourself - Is a trade possible, ask yourself WHY you should take this trade. If you cannot come up with enough reason to take it then there is a good chance that you are not comfortable with it and therefore your better on the sidelines. If you take trades you are not comfortable in you will struggle to manage them with an emotional input which basically means you will be trigger happy on the take profit sides.

Building a trading plan per trade is about have a clear approach, execution and outlook.

The approach is the analysis, the execution comes after being happy with the analysis which includes all aspects of risk and the outlook is having a clear goal which you can manage.

Razor

Yes sir , you are correct. I see people on J16 threads drawing the most random fibonaccis , and the sad part , no one corrects them. So I took a decision to learn how to draw it and I intend to use it with confluence of key levels.