Approaching the end of the third week of the Explosive Growth Mentoring trading room. There were lots of news items on the economic calendar this morning, all related to EUR and USD. The USD Unemployment Claims number came in negative, but seemed to have little to no effect on the USD pairs. Apparently the big news was the ECB Press Conference headed by the President and the Vice President of the European Central Bank. As the scuttlebutt goes, if the president is wearing a red tie, the news is bad, if a blue tie, the news is good.
Uh Oh! He’s Wearing the Red Tie
It seems President Mario Draghi came out wearing the Red Tie. That’s an ominous sign. I didn’t actually listen to the press conference, but watching the EUR/USD gave me an almost immediate indication that his message was negative. The EUR/USD spiked down (negative EUR) within minutes for over 130 pips. As you know, my plan was to stand aside until the initial impulse is over and then look for a retracement to trade in the direction of the impulse.
Looking for the Trade
When the impulsive move stopped, the EUR/USD had dropped 142 pips. I put my Fibonacci tool on the move and placed a pending short order at the 38.2% level of 1.0833 then waited. Price retraced to the 23.6% level and dropped. Since the retracement was so weak, I decided to short the 23.6% level on the next touch. It didn’t take very long before I was in the short position. As usual, I was only looking for a 5 – 10 pip scalp trade. It only took 43 seconds to get my 5.6 pips. I really like trades like that.
The EUR/USD Didn’t Cooperate
As it turned out, the EUR/USD just lolly-gagged around the 23.6% and the 38.2% Fibonacci levels and was moving very slowly, so I decided to play bounces off the Fibonacci levels – again looking only for 5ish pips. I succeeded in taking a position most times a Fibo level was touched for small, short-term scalps. At one point, I got stuck when the 23.6% fibo broke, so I added a position at the 38.2% and closed it in profit a few times, then I got out on a pop into positive territory on my first position. By that time, the pair was moving so slowly I quit before falling asleep.
Have a Library of Strategies
The moral of this story is have a plan that includes a library of different strategies for trading a pair that’s not cooperating. I was looking for a retracement and a drop after the initial news impulse down. It didn’t work out that way, but I was still able to scalp for a few pips in the meantime.
Have a great trading day,
Winner’s Edge Trading, as seen on: