A Look Back At Forex Trading - 4/5/06

A Look Back At Forex Trading - 4/5/06
We have been lucky over the past few weeks to be able to tell you about our good trade nights, well today we will tell you about a bad one. Personally I was stopped out of both of my trades last night for a 80 pip loss.While it is not pleasant, it's a fact of trading, you are going to have losing trades, you would be foolish to believe you will only have good trades and never lose.In discussing last night between ourselves we realized that several of our traders whom trade reversal patterns were all over Cable last night, and we have to look no further than the newsletter I wrote last night to see how they did it.Personally I rely heavily on various support and resistance levels for my trading style, and in doing so, it is easy to over look, what many believe it the strongest indicator available, Candlestick patterns. Lets look at what I wrote last night;For those of you who are fans of the candlestick patterns, we had a perfect double bottom form on both the 4 hour and the 1 hour charts yesterday, right before the spike up, I hope you saw it and were able to get in a long position. Anywhere from 100 to 150 pips could have been had on the move. The double bottom formed in the first couple of hour of the London market, those of you who actively trade the London market were the beneficiary's of a classic pattern that worked to perfection. I on the other hand missed this as I was studying the backs of my eyelids and not the charts at 3:00 AM EST.How silly was it of me to dismiss the reversal for poultry 100 pip move. The pattern we have been in since February has been a trading range between 1.7600 and 1.7230. That initial move left us at 1.7400, a full 200 pips short of the established top of our range, which by the way it exactly where we are now.Tonight we are trading around 1.7595 our first region of resistance is in the 1,7600 range, and a second region around 1.7660. For support we look to around 1.7540.While it is obvious after the last two days that we are in a short term up trend, we have the super resistance of 1.7600 to break. Since February we have only broken above it once to 1.7624, and that was a quick spike that came immediately back down. Cable has tested 1.7600 at least a half a dozen times and held, so being a support and resistance guy I feel we are staying with the established trading range.As all of you know only time will tell, but having a good forex trading education will make a lot easier for you to predict future movement and make successful trades.