04 February 2010

EUR/USD : Increased Short Position

  • Risk on my core book = short EUR in one form or another.
  • Recent new low of sell-off achieved today at 1.3839. Previous low was at 1.3850. Assume new down leg about to begin.
  • Put on small 20% increase in overall short position on break of 1.3850 (NFP event risk tomorrow notwithstanding).
  • Monthly : 1.3667 next chart point. Not expecting this to contain the sell-off though.
  • Weekly : Bear flag objective is 1.3654.
  • Addendum 8:39 pm : Calculation of bear flag objective
  • Length of flag pole = (1.5144-1.4216) = 0.0928
  • Bear flag sell-off start point = 1.4582
  • Assume equi-distance downside objective = (1.4582-0.0928) = 1.3654
  • As a trend trader, I would not assume the sell-off ends at 1.3654. Plan to maintain a core short until chart pattern shows a bottom action. Ride the trend!

2 comments:

SimpleTrader said...

Hey TS,

Always good to read your charts, I am constantly learning something from you.
I want to know, how do you calculate the 'bear flag objective' from the chart, as you have done in the weekly EU chart here.

Thanks.
Pandu

Taichiseal said...

Pandu - see addendum.