Tuesday, December 2, 2014

2 Dec 2014: EURJPY daytrade #3

This was a counter-trend today. Price on the EURJPY was hitting yesterday's high. From my own quantitative study, I know that reversals will tend to occur during the Europe / US overlap session, so if the EURJPY was to reverse, this would be a good time and price level to do it (the previous day's high and low tend to act as resistance and support). 

However, I also know that counter-trend trades are dangerous. I quickly debated with myself if I should go for a small or large reward, and opted for small (1R reward).

I saw a lower swing high being established on the 5M chart, and went short. I took profit just above 148.000, which would've acted as short-term support, and won 1R. 

The thing about trading the day's reversal is that even though price may've stopped advancing, the reversal itself may not be that big, which is also why I opted for 1R. 

(click to enlarge)

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