I couldn't help myself. When I see money just laying there on the ground, I have to pick it up.
In the midst of my trading day, I was handed a "Sure Breakout" trade that I couldn't resist to take in the Forex Challenge account.
It was a breakout from a very narrow 66 pip / 40 hour range in the USD/CHF pair. I bought 1425 units of USD/CHF @1.1042 and exited @ 1.1102 for a targeted 60 pips. The attached chart will make the reason for the trade and the exit clear.
At least the trade improved the account equity a little-- now at $508.87. Total risk for the trade was only 30 pips, with the initial stoploss placed at --1.1012.
Markets tend to travel in multiples of the ranges they break out from. I didn't discover this concept. The market does it all by itself.
W.D. Gann was the first trader to discover and write at length about the phenomena. I think every trader should get a copy of "How to Make Profits Trading Commodities"-- his premiere work. Even though at first glance the book may appear dated, and the material seems to only dwell on commodities like corn and wheat-- there are many unique trading tools that are only found in this extremely valuable volume which apply to all free markets. Including Forex.
One of them was the proofs of how mathematically precise future movements are based on previous ranges.
Tomorrow we have Canadian and US Trade Balance reports @ 7:30 CST. The news may help tip the market into some direction for Friday. A good OneNightStand trade or two would be welcome.
Best wishes on your evening.
Joel Rensink
www.infiniteyield.com
PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent.
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