The follow-up to my euro trade

John C Burford ups his protective stop to break-even as Friday's rise in the euro yields fantastic returns. But with a rally in the market off Monday's low, how will he make his next move?

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in Features

On Thursday May 19, I covereda possible long euro trade where I went long EUR/USD on a tramline break-out (or on the subsequent pull-back).

That trade was taken in the $1.4210 area. My protective stop was moved up to break-even yesterday, following the successful re-test of the break-out tramline.

Again, here is the chart showing the tramline break-out:

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MWTrader-11-05-23-1

(Click on the chart for a larger version)

Now on Friday May 20, as I write, the euro has made it to my upper tramline:

MWTrader-11-05-23-2

(Click on the chart for a larger version)

That's where I took profits of over 100 pips. That is a profit of £100 per £1 spread bet.

Remember, this long trade was taken against the backdrop of a huge move down from the May 2 high.

Note that the rally off Monday's low is a tepid affair (compare the choppy rally with the strong impulsivelooking retreat off the high).

That brings up the question: shall I go short here as it has made the upper tramline? I'll discuss the answer to that in the next blog.

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John C Burford

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.

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