Sunday, March 15, 2009

Me 'n The Swiss Central Bank

Trading the EuroFX futures in the overnight session.

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As mentioned in my Twitter tweets, the Swiss Central Bank intervened in the Forex market, selling Swiss Francs and thereby driving up other currencies. With that as context for the EuroFX, heading into this session, I knew I would have to play it safe and save the home run attempts for later......

Trade1: long 6EM9 @1.2865
Added: 2nd long @1.2842, stop@1.2835
exited @1.2867

As indicated by the chart, the Euro, like the rest of the major currencies, gapped down to open the session. From my analysis, there was support @1.2865, since the Euro tagged that level several times on Friday as it chopped sideways.
Now that it was known that the Swiss is participating in this market, it would be better to work with them than against them.
First attempt to go long was to buy right at support. Nothing wrong with that idea, except sellers were not done. In fact, dropping a couple ticks below 1.2865 triggered a LOT of sell stops, and within seconds we were at 1.284. At this point, QStk and ADX were both pointing to a high possibility of selling exhaustion, and I figured the Swiss might take a nibble here too, so I added to my long @1.2842. It was here that I finally entered my sell stop, just in case i was wrong. After chopping around in the low 40's, price began stabilizing and recovered. Within 10min, it had stopped downtrend, and was challenging the declining 9bar EMA, which met my time stop expectations. I also saw a series of higher lows, which was good news to me. As price approached 1.2865, will it become resistance ? I had no clue, so I trailed my stop up to 1.285. The market told me very shortly thereafter, as I saw an impulse push above 1.2865. I exited near declining VWAP, 1.2867.
There may be more trades later tonight, but now that I have this under my belt, no need to be as aggressive.

Trade Mgmt: B+
Emotional Mgmt: B
Focus & Alertness: B+

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