EUR/USD: 27 JULY 2012 WHY 5 DAYS HIGH COULD MATTERS
Figure 1.1 EUR/USD 4hours time frame- Courtesy from OANDA
As mentioned in the article “ Get Ready for the Pullback on EURUSD: 26 July Update” Traders may look 1.2250 levels at 5 days high price level to enter a short (sell) position. This seems to be happening as shown in Figure 1.1, the highlighted area showing 2 bearish (seller dominant) candlesticks. The 2nd candlestick from the right shown in the blue shaded rectangle experienced a high of 1.2314 and a low of 1.2273. As of 27 July 2012, 1hour after the London Open, Price was seen flirting in the level of 1.2250.
Enter at 5 days high
A strategy that enters when price moved in opposite direction of a main trend (or counter trend) to reach 5 days high or low can be rather lucrative to trade. Shown below is a simulation result on equity growth did from 2005.04.27 till 2011.02.10 that triggered over 90 trades. Equity growth is dependent on entry/exit and not solely on the strategy, thus the below results only serve as a reference. Short Positions won% was 47.06% and Long Positions won% was 56.90%.
Yesterday presented the pullback to hit the criteria for my entry, and certainly look forward to see probability works in my favour. The 5 days high reached by the EUR/USD yesterday may just be the best opportunity to ride the trend!
Want to read more articles like this one?
Enter your e-mail address and read FX Empire content directly from your inbox.
We value your privacy. Your e-mail address will not be shared.
FX Empire - The company, employees, subsidiaries and associates,
are not liable nor shall they be held liable jointly or severally for any loss or damage as a result of reliance on the information provided on this website. The data contained in this website is not necessarily provided in real-time nor is it necessarily accurate.
All prices herein are provided by market makers and not by exchanges. As such prices may not be accurate and they may differ from the actual market price. FX Empire bears no responsibility for any trading losses you might incur as a result of using any data within the FX Empire.