Took a break

I took a bit of a break from trading to focus on my new job and life here in Austin TX. After a couple of trips to Costa Rica and meeting @raserrano, I decided to get back into it. @raserrano is incredibly energetic and enthusiastic about cryptocurrency, Steemit, Linux, and of course the futbol team Saprissa- gotta admit, its infectious! He's been prodding me to make a trade and be transparent about the strategy and what I earn and lose.

While Crypto is all exciting and everything, my 1st love is traditional currency pairs- they follow some standard things and move in sorta predictable ways. There's this "thing" called the Interbank Price Delivery Algorithm that makes price do certain things at certain times. I first learned about it a few years ago and thought it was bullshit, but have seen price do things that support the concept. For now, I'll talk about this trade I took.

I've been stalking the quote USD currency index (DXY) and the base currencies the Euro (EUR), the Great British Pound (GBP) and the EUR/GBP pairs for a few days now because of some things that I see- more on that in a bit...

The currency pairs (Euro, The Great British Pound, USDollar) represent a "Triad" in Forex currency terms and are studied as a whole. Typically, when the USD falls, the corresponding Euro and GBP rise and vice versa. The Eur/GBP pair is sort of a wild card, and determines which of the 2 move and in which direction. I use this cheat sheet to help figure which pair to choose given the market conditions:

Here's what the Euro, GBP, Eur/GBP, and USD were doing 3 days ago:

As can be seen from the DXY US index, it was in the overbought state, matching prices from last August heading for highs seen last year in June. The Stochastic oscillator mirrors this and indicates a likely move down.

Both the Euro and GBP are also queued up for reversals, but which one should you take a trade in? That's where the Eur/GBP comes into play. As can be seen, the Eur/GBP was heading into overbought territory and headed for a reversal. Given the fact the both USD index and Eur/GBP were most likely going to decrease meant that the GBP was most likely gonna increase 1st.

To prepare for the trade, I borrowed .03 Bitcoins, interest free, from my Bitshares DEX wallet using Bitshares as collateral. Here's the transaction:

I forwarded the Bitcoin to a Simplefx account, which by the way, is not accessible to anyone in the United States. I had to use the TOR network and bounce around the world a few times before I connected. Here's a shot of my account:

When to enter the trade?

The 2 best times to enter a forex trade (translation: most volatility) is during the London and New York Open sessions. I don't trade the Asain session. Since the London open happens at 2-3am Austin TX time, I choose the NY open session which happens at 8am. I choose an hourly order block that price may fall to (if I'm buying). There are other things you can use to base an entry on, but I usually use a lower time frame chart to place an entry. Here's a screen shot of my order and its location relative to the active pricing (at that time). Its lower than the active price because I knew it would decrease. In full disclosure, I placed my limit order before I went to bed, and place a second order when I woke up when I saw the active price dipped lower than I thought.

How to manage?

I'll be moving up my stops to key positions on the hourly if the positions start becoming profitable.

Exit Plan

Despite what happens to the position, I will exit the trade when my price objective of 1.33 based on the 2 recent highs that haven't been challenged yet. I'll also keep my eye on the Stochastic for an Over bought signal on the daily time frame.

Update: Since this trade happened last night, Here's an update:

This has been a successful trade so far....