Good morning traders.
R1 triggered yesterday at 1.12. As I said in the notes for yesterday I would be in scalp mode so I took +10 and moved stops to BE. The trade then went on to take out the level and stops. If you stayed in the trade from a model strategy you would be out for -13. This is a good example of the first test being the best entry of any level. The odds of it making positive returns when it is first hit is high. How many is uncertain but when I am scalping I always look for 10.
Why do I take profits early and move stops? I can only say that it works for me. I am a full time discretionary scalp / day trader and take what is available during the course of regular trading hours. I have written about my rationale and posted my article previously but if you are interested here it is again. That is not to say that using a set and forget strategy cannot work as we have proved it can and does with our model strategy. It is more about what is optimum for your circumstances.
Updated May performance as noted below. It has been our worst month from a model pov with 3 losing or break even weeks but we still managed to come out on top for the month. The max strategy (discretionary) is much more profitable but it requires you to be able to trade and manage your positions during the day on a full time basis. Still, we have a winning strategy here guys!
It proves that support and resistance forms the basis of profitable trading in my eyes. Sure, there is more to it than that but you don’t need to get into complicated analyses or strategies. Stick to the basics, understand how to pick decent S & R, be aware of the context of the days trading session and take the set ups. Not rocket science really :).
Today we have flash CPI´s for the EZ at 11.00 CET and the Feds Powell on the wires at 15.55 CET.
The Daily Chart
We had a strong push up overnight as Fed heads were talking about rate cuts in the US. We will get a better picture from Powell later this afternoon. If he too suggest cuts then a further push up to 1.13 could be forthcoming.
The Hour Chart
Levels as per.
As yesterday I am short term day trading / scalping today and any levels tagged will be managed on a discretionary basis i.e. I will not be using our model strategy but will be taking partials where appropriate. Due to the push up on US interest rate cut comments we have to look much higher to get a decent R1 level. I don´t expect it to be hit today and I will be watching the 1.1280 and 1.13 levels should we get some follow up momentum higher.
Have a good one :).