EURUSD Inside Bar Trading 11 September 2013

EURUSD Inside Bar Trading 11 September 2013 - Click to enlarge

Details: 
Currency pair: EURUSD
Day: Wednesday
Date: 11 September 2013
Local open time (GMT +8): 9:54am 
MT4 open time: 4:54am
Type of order: Buy stop
Entry price: 1.3280
Stop loss: 1.3230 @ 50 pips
Target Profit: 1.3360 (Placed to protect profit due to FOMC News)
Result: WIN 80pips

Why did I enter this trade?
An opportunity to trade the Inside Bar technique using price action.

Chart analysis:
EURUSD has made a bullish reversal after last week Friday (6 Sept 2013) NFP news. Then on Monday (9 Sept 2013) morning on the chart, there is a Sunday bar, and Monday close with a big bullish candle. Then comes Tuesday (10 Sept 2013), probably consolidation period, as price have move a lot on Monday and is trading around Resistance area at 1.3260 and created an inside bar after close.

The inside bar open below and near to Resistance area at 1.3260. Price rallied around the Resistance area and created a lower longer wick, but eventually break and close above the Resistance area. Also the lower longer wick, signaling that Buyers are still strong at this level and don't want to let price drop.

A Buy Stop is place on the high of Monday candle and Stop Loss is place 50 pips (my Max stop loss) below and is close to the low of Tuesday candle. Monday candle high is use as entry point because, if price can breakout this level, then probably high chance that price will continue to follow the bullish trend.

Trading plan
Plan to ride this trade. So didn't place any Target Profit. Will move Stop Loss to Break even after Price moved minimum 35 pips away from entry point.

Update
9:30pm - 12 Sept 2013

EURUSD Inside Bar Trading 11 September 2013 Update - Click to enlarge

Check in on the chart and saw a potential reversal or retracement candle today, but of course, the daily candle haven't close yet. Supposingly if I check in earlier when today's price was at it's high, and I moved Stop Loss to Break even due to my Trading Plan for this trade which is to move Stop Loss to Break even when Price moved away from entry point by a minimum of 35 pips, this trade would have been closed by now. Well I did manage to have a quick peek in the morning and afternoon, but situation wasn't convincing to move Stop Loss to Break even as market was quiet during the Asian session, plus I was busy at work, and couldn't care less. So let's see how it goes.

10:30pm - 12 Sept 2013

EURUSD - Click to enlarge

Came back to this post to edit some words, and had a quick peek again on the chart after shower, and this is what happen after an hour. Didn't want to be stuck looking at the chart, but I feel like updating this one as a record for myself to remind me that price can move in an uncertain manner so never make quick judgement without looking further and be patience, because an hour ago, I was at the loosing end, as price was below my entry point, and this give me nervous feeling that price will hit the stop loss.

Had this feeling all the time, and many time, I exited the trade manually, because afraid of loosing, even though I have already place a stop loss. In those previous trades, that I behave like this, I should let it be and let the market take me out instead of exiting manually because afraid of loosing, while I'm actually prepared to lose with a Stop Loss. Lesson of the day, is stick to the plan. Hope to strengthen this part of my emotion in trading.

1:11am - 14 Sept 2013

EURUSD - Click to enlarge

Update for today, as expected, yesterday's candle did retrace back and close above entry point. However, same situation happening today, this time up to now, by looking at the last three candle from the screenshot, Price is trying hard to breakout above the Blue Line. This Blue Line is drawn in Paint, not on the chart. Only by dragging back this Blue Line, did I notice that it happens to be a strong support area, as Price rejection occur 4 times around this area in the past. So this will confirm that the Blue Line is a strong Support and Resistance area. Also, up to now, the last three candle still indicates that Bull is still strong, with a large Green candle, follow with yesterday candle with a long lower wick, and today candle seems like trying to form similar pattern. It is Friday, and normally people don't keep the trade open during the weekend, to avoid losses next week if price moved in the opposite. Anyway, I will stick on to the plan keep the position open, to see how it goes next week, this will be a training for myself, both in chart analysis and emotion.

10:30pm - 15 Sept 2013

EURUSD - Click to enlarge

Checkin on the chart on the weekend, price probably may continue to move up, as the Weekly chart close as a strong Bullish Candle. However price has reach one a very strong Resistance Area. On the Daily chart, Price try to break the resistance area 3 consecutive times, but fail and close below the area. I will wait for next week to see what is going on.

8:30pm - 16 Sept 2013

EURUSD - Click to enlarge

Did check the chart in the morning today, but couldn't update this blog. So here is the update and screenshot. Gaps occur today, about 60 pips on the EURUSD. Also, Gap occur on all Forex Major Pairs; GBPUSD, USDJPY, AUDUSD, NZDUSD, USDCAD and USDCHF. For all pair with USD as quote currency, gap is bullish...and all pair with USD as base currency, gap is bearish. In my opinion, this indicates that USD has weakens. High chance, price is moving in their respective direction.

Back to EURUSD, I see that price will continue bullish, here's why:

Hammer on Weekly Chart

On the weekly chart, there is a Hammer candle, also last week candle close as strong bullish candle. This tell me that price is still strong. However there will be two indicator for me to determine the movement. If price can move higher and breakout the above Resistance, then price may continue bullish. Like wise if price breakout below support, which is where the current price is now, price may reverse. Also another bullish indicator is that price is creating lower longer wick on the support.

Changes I made earlier today is moved Stop Loss +27 pips away from Entry, which is also about -10 pips below last week major Resistance now turn Support. Also I place Take profit earlier this morning at 1.3400, but removed it, as I still assume that price will continue bullish.

11:30pm - 18 Sept 2013
I did not have the chance to update this blog yesterday, but I made some changes to the trade, I add on another position. Below is the screenshot:

EURUSD add on position

Details: 
Currency pair: EURUSD
Day: Tuesday
Date: 17 September 2013
Local open time (GMT +8): 12:07am (18 September 2013)
MT4 open time: 17:07am
Type of order: Buy stop
Entry price: 1.3345
Stop loss: 1.3325 @ 20 pips
Target Profit:  
Result: 

This was an add on trade, to the current trade. Will probably do a separate blog on this. At present, here is the current situation.

EURUSD - Click to enlarge

For the past 3 days since Monday, price have been ranging. This is probably due to the upcoming FOMC news that is schedule to be out at 2.00 am (GMT +8), 19 September 2013. Currently price is now raging above 1.3345 (±5 pips) area, which is also the entry of the second position. Also some price action on the Daily chart indicating that price may continue bullish. Below is screenshot of Daily Chart

EURUSD Bullish Confirmation trend.

The 2 circled candles, if combined together forms a Doji, an indicision candle. With all the Daily candle for this week forming above the support area, indicates that the bullish trend may continue. However, the FOMC news is due to be release soon, price might make a reversal. It's hard to say now where price will go.

Here's what I will do, I will set Target profit for the first trade at 1.3360 to protect profit, and let the second position run, to catch the news if it goes in my favor, or else I lose by stop loss. First trade Stop Loss will also move to 1.3325 which is the Stop Loss of the 2nd position. Go to bed, and see what happen in the morning.

7:30pm - 19 Sept 2013

FOMC news result

Yes!!! Result of the news goes in my favor. First position was closed with Target Profit @ 1.3360 and made me 80 pips. Since price went bullish after FOMC news, second position is now in profit, and Stop Loss is moved to 1.3497 to lock 152 pips. 1.3497 is an odd number, and I didn't round up the number because I moved Stop Loss immediately after I saw this big move at around 4 am in the morning, as at that time I couldn't sleep. Also, I did it thru MT4 on my phone, and I couldn't do much drawing, just base on the grid on the chart.

The news was unpredictable, I'm glad that I lock profit on the first trade, as the trade may go the other way round, and if I have not place a Target Profit close enough, it may not be hit, and I may end up hitting positive Stop Loss. Same time the second trade will also end up hitting negative Stop Loss.