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11-29-2016 EUR/USD Scale short

12/08/2016

EUR/USD Scale short on higher resistance, in a consolidating daily market

Type of Trade: Consolidation and scaling on lower timeframe charts based on support / resistance and m15 entries. All trades were placed with limit sell orders and this trade was not actively watched until initiated.  Goal wasn’t to pick a long swing move, but grab pips as the daily euro graph consolidated and bounced around.

The following shows how a trader can trad counter-trend, scale in and “add to a losing trade” and make money.  This is a favorite strategy when the market is in a consolidation pattern.  Money management, position size management, and leverage management are key.

Strategy:

  • Short the long ish move on fib pullbacks and prior resistance zones / watching for spike moves long.
  • Start with a small position size.  Each short position added is larger than the last (though not always necessary).
  • Max position exposure for account balance is in place.
  • Entire group of trades should be considered one trade.
  • Acceptable strategy when there isn’t time to watch the market in depth

006-eurusd-m15-11-29-2016-overview

Additional notes:  Accidentally closed out portions of positions early (first large red buy arrow and re-entered short with the same position size as seen in the following two charts:

001 - 11-29-16 EURUSDscale short, accidental closeout early.jpg

004 - 11-29-16 m5 EURUSD scale short, accidental closeout early - final trade.jpg

6 total entries short. and take profit for entire position on the .382 fib retracement and frontrun of prior support / resistance zone of the most recent M15 swing higher as seen below:

005 - 11-29-16 m15 EURUSD scale short, reentry.jpg

Conclusion: Excellent trade.  Good entries and looked to re-short position higher (and did in the next trade).  A little sloppy in the execution (early close out) and entries could have been cleaner.  But not bad.

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