Get Back on the Horse – EURUSD Day Trades October 17

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Contents

Get Back on the Horse – EUR/USD Day Trades October 17

Losing trades happen–to everyone–so as long as you follow your strategy, and executed the losing trade according to your plan, that losing trade doesn’t matter. A good trade or bad trade should not be determined on the result of the trade, but on whether you executed your plan correctly.

As traders we need to learn to almost appreciate our losing trades, as they may show us something that sets us up for the next winning trade. After a losing trade we need to be able to “get back on the horse,” and sometimes very quickly. Just because we lost on a trade doesn’t mean we shouldn’t take the next signal that comes along.

Don’t Skip Signals

Many traders still fail when they implement a winning strategy because they skip trades after a loss. Since I mostly trade with trends I find I win two or three trades in a row, and then lose one (sometimes two if there is choppiness or a strong retracement) as the trend reverses, then win another two trades or so if the new trend direction continues.

If a loss discourages you enough to skip a couple trades (possibly winning ones), you may end up getting back in the market right when another reversal is due. A valid signal is not nullified just because of personal mood. Although, if you are very emotional about something it is probably best to step away from trading and take the day off, since it’s very hard to stay disciplined when emotions are running high.

Get Back on the Horse

Getting back on the horse after a fall (losing trade) isn’t easy, but doing so will force you to let go of the losing trade and refocus on the market. If it helps, you can think of your losing trades as market probes which help you find the next winning trade. Today provided a great example–lose $145 on one of the trades I really liked the look of, to make $425 several moments later on a trade in the opposite direction. Would you take this trade-off several times a day, if someone offered it to you? You better, because that’s what trading is. Accept the loser, as it is the just the cost of making winners (which should be bigger than the loss).

The EURUSD had been strong during the European session and was continuing to show strength as the US market opened (when bright yellow turns to pale yellow on the chart below). After two runs higher and some hesitation near the top, I expected a deeper pullback. It occurred, and was strong enough for me to start looking for a short trade. The basic strategy employed is outlined in Forex Day Trades – October 7, with additional details in other forex day trading posts.

Figure 1. EURUSD Day Trade Examples – October 17

Entered a short trade near the upper band, but was stopped out for a loss of 3.5 pips. This stop could have been reduced slightly, but I gave it room to move as my expectation was for another move lower after the strong fall.

Instead, the EURUSD created a higher low, followed by a higher high, indicating a further decline was becoming remote, and instead the price could rally again, in alignment with the overall uptrend of the day.

Despite having just lost a trade, I took a trade in the opposite direction (went long near the lower band) based on the new evidence, and the uptrend did indeed continue.

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My buy order was partially filled which gave me two positions in this case, so I exited the first at a Fibonacci level above the recent high for a 10.6 pip gain (had I not ended up with two positions I would have exited everything here), and then exited the rest for a 15.3 pip gain as the price consolidated a bit after the further run up.

There is an important distinction between getting back on the horse and “revenge trading”–where you try to find any trade you can to make your money back. Trading is about reading the market, and being able to adapt to new information. Losing trades occur, so don’t skip another valid signal just because you had a loss. If you are calm and willing to accept your loss, and another valid signal comes along, trade it. Only avoid trades if you are distressed, or, if you have multiple losses in a row you may want to step back and ask yourself why the losses occurred. Maybe it is just a choppy trading day and it is best not to trade, or you may not be executing your strategy as planned and therefore can rectify the situation.

EUR/USD Trades Down From 2020 Highs

  • EUR/USD Trades Down From New 2020 Highs
  • Support Found at the 10 Day EMA at 1.1015
  • Looking for additional trade ideas for the Euro? Read our 2020 Market Forecast

The EUR/USD has now advanced 250 pips for this week’s trading, and is now trading off of its 2020 high at 1.1172. Technically, this bullish move is significant as it places the EUR/USD back above the key 1.1000 value. If prices continue to rally, traders will next look for the EUR/USD to test the November 2020 high at 1.1299.

Traders should note that the 10 day EMA (exponential moving average) for the EUR/USD is found at 1.1015. This line remains a value of support as the pair continues to trend higher. In the event of a price reversal, traders should first look for prices to breach this line. Further bearish declines may next expose 1.1000 as well as the standing May 2020 low at 1.0839.

EUR/USD Prices, Daily Chart with averages

Intraday analysis now has the EUR/USD turning lower in the short term. The pair is currently testing support found at today’s S1 pivot, found at 1.1105. A decline below this value may see the EUR/USD trading back below 1.1100 to then test other values of support. This includes both the S2 and S3 pivots, found at 1.1148 and 1.1015 respectfully. Traders should note that today’s S3 pivot lines up at the same point as the previously mentioned 10 day EMA. A breakout below this point should be seen as significant as it would suggest a change in the markets trend.

In the event that prices bounce above today’s S1 pivot, traders may look for bullish momentum to resume above today’s central pivot at 1.1138. A continued advance would then expose the previous high at 1.1172 as well as other points of resistance. This includes both the R1 and R2 pivots, found at 1.1194 and 1.1227 respectfully.

EUR/USD, 30 Minute Chart and Pivots

— Written by Walker, Analyst for DailyFX.com

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See Walker’s most recent articles at his Bio Page .

Contact and Follow Walker on Twitter @WEnglandFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

How to Read the EUR/USD – October 16 EUR/USD Day Trades

Paying attention to price action doesn’t just occur before a trade, price action is also very closely monitored while a trade is underway.

We take trades because our strategy indicates to do so based on current market conditions, and a stop loss and profit target are placed to limit risk as well as capitalize on those conditions. But conditions change.

When starting out it is beneficial to let the price hit either your stop or profit target. This forces you to become detached emotionally from the trade, let the market move without trying to impose your will on it, as well as fine-tune your strategy. Once discipline has been developed, as well as a heightened ability to read the market, there is no reason to let your stop get hit if you see that conditions have turned against you.

One of my trades today provided an example of this.

Figure 1. EUR/USD Failed Trade

The EUR/USD was in a strong uptrend through the European session. After the US market opened (pale yellow on the chart) there was another run to the upside. Unlike prior runs to the upside, this push higher had a pause in it; not anything which would cause me to skip the next trade, but I did note it.

The pullback was also quite sharp, and I took a trade just below the lower envelopes (for information on the basic strategy see: EUR/USD Day Trades-October 10 and prior trade journal articles). The price continued to drop a bit further and then consolidated, which is fine.

The price then began to rally. But it barely made it past the upper band, and out of the consolidation area before it got hit by strong selling. I exited just above my entry point for basically a flat trade, which turned out to be a good decision as my stop would have been hit moments later.

Piecing it Together

Deciding whether to let a trade hit your stop or profit target, or instead manage it manually like I did on this trade shouldn’t be taken lightly. There are times when getting stopped out is worth the risk, and other times when a condition change makes the reward potential unattractive relative to the risk.

In my trade above, the trend had been in effect since the start of the European session, without a significant pullback in several hours. Knowing that a reversal is “eventually” going to occur is never a reason to avoid a trade, but it should be noted and then included with other evidence which appears.

The price also rallied toward the former high, but before making it there witnessed strong selling. This created a lower high, and indicated the up trend may be in trouble. The swiftness of the selling, combined with the lower high and maturity of the trend indicated it was better to exit the trade than hold out for my target to be hit. Based on the new information provided by the market it was unlikely that my target would get hit before my stop.

Had this trade occurred earlier in a trend, I likely would have let the trade hit my stop or target. The price rarely just surges in our direction to hit our target, pullbacks occur the way. Early in the trend, holding through a few market gyrations is worth the risk as early in the trend the target still has a high probability of getting hit.

Therefore the “maturity” of the trend is an important factor in whether I actively manage a trade once I am in it. I define a mature trend as more than 5-waves since the last significant correction. The EUR/USD has a tendency to run for 7-waves on the 1-minute chart before a significant reversal.

This particular trend had already had 11 waves. This alone isn’t a reason to avoid a trade, especially since the EUR/USD was still showing strength when the trade was taken. But this late in a trend a more significant reversal becomes more and more imminent, so being aware of that is important.

Figure 2 shows the waves in the EUR/USD on a 1-minute chart (note: not all waves labelled).

Figure 2. EUR/USD Labeled Waves on 1-Minute Chart

The arrow near the top of the trend marks my entry, and the exit is also marked. From this vantage point we can see the market was struggling to keep pushing higher. Seeing this in real-time is what takes practice. A trader must also be able to accept that market movements are not totally predictable, and that the price could have surged higher as soon as I exited my long.

Most new trades will benefit from learning to read the market in real-time, scrutinizing price movements, but being detached enough to let the price hit their stop or profit target. This creates discipline. More advanced traders can look to actively manage certain trades, as doing so in the right way will likely increase the percentage of trades won.

Historical Rates for the EUR/USD currency conversion on 31 October 2020 (31/10/2020).

On the 31st October 2020 the spot inter-bank market saw:

Open: 1 EUR = 1.1651 USD

Close: 1 EUR = 1.1652 USD

Average: 1 EUR = 1.1648 USD

Lowest: 1 EUR = 1.1643 USD

Highest: 1 EUR = 1.1652 USD

Today’s Live Euro into U.S. Dollar Exchange Rate

Spot: 1 EUR = 1.0850 USD

Independent Provider: 1 EUR = 1.0774

Avge. UK Bank International Payment: 1 EUR = 1.0425 USD

EUR/USD Conversion Table History

See below quick comparision table showing how the most popular currency requirements for the Euro / U.S. Dollar exchange rate conversions on the 31st of October compared.

Euros into U.S. Dollars U.S. Dollars into Euro Date
1 EUR = 1.1652 USD 0.8582 EUR = 1 USD on 31/10/2020
5 EUR = 5.8260 USD 4.2910 EUR = 5 USD on 31/10/2020
10 EUR = 11.6520 USD 8.5820 EUR = 10 USD on 31/10/2020
15 EUR = 17.4780 USD 12.8730 EUR = 15 USD on 31/10/2020
20 EUR = 23.3040 USD 17.1640 EUR = 20 USD on 31/10/2020
25 EUR = 29.1300 USD 21.4550 EUR = 25 USD on 31/10/2020
50 EUR = 58.2600 USD 42.9100 EUR = 50 USD on 31/10/2020
100 EUR = 116.5200 USD 85.8200 EUR = 100 USD on 31/10/2020
500 EUR = 582.6000 USD 429.1000 EUR = 500 USD on 31/10/2020
1000 EUR = 1,165.2000 USD 858.2000 EUR = 1000 USD on 31/10/2020
2500 EUR = 2,913.0000 USD 2,145.5000 EUR = 2500 USD on 31/10/2020
5000 EUR = 5,826.0000 USD 4,291.0000 EUR = 5000 USD on 31/10/2020
10000 EUR = 11,652.0000 USD 8,582.0000 EUR = 10000 USD on 31/10/2020
25000 EUR = 29,130.0000 USD 21,455.0000 EUR = 25000 USD on 31/10/2020
50000 EUR = 58,260.0000 USD 42,910.0000 EUR = 50000 USD on 31/10/2020
100000 EUR = 116,520.0000 USD 85,820.0000 EUR = 100000 USD on 31/10/2020
250000 EUR = 291,300.0000 USD 214,550.0000 EUR = 250000 USD on 31/10/2020
500000 EUR = 582,600.0000 USD 429,100.0000 EUR = 500000 USD on 31/10/2020
1000000 EUR = 1,165,200.0000 USD 858,200.0000 EUR = 1000000 USD on 31/10/2020

Official ECB Euro to Pound Exchange Rates to Reference

0.87738 GBP = 1 EUR 2020-04-02 ECB Reference rate

1 EUR buys 0.87738 Pound sterling (GBP) – The reference exchange rates are published both by electronic market information providers and on the ECB’s website shortly after the concertation procedure.

0.88460 GBP = 1 EUR 2020-04-01 ECB Reference rate

1 EUR buys 0.88460 Pound sterling (GBP) – The reference exchange rates are published both by electronic market information providers and on the ECB’s website shortly after the concertation procedure.

0.88643 GBP = 1 EUR 2020-03-31 ECB Reference rate

1 EUR buys 0.88643 Pound sterling (GBP) – The reference exchange rates are published both by electronic market information providers and on the ECB’s website shortly after the concertation procedure.

0.88900 GBP = 1 EUR 2020-03-30 ECB Reference rate

1 EUR buys 0.88900 Pound sterling (GBP) – The reference exchange rates are published both by electronic market information providers and on the ECB’s website shortly after the concertation procedure.

0.89743 GBP = 1 EUR 2020-03-27 ECB Reference rate

1 EUR buys 0.89743 Pound sterling (GBP) – The reference exchange rates are published both by electronic market information providers and on the ECB’s website shortly after the concertation procedure.

EUR to USD Exchange Rate News

Euro-to-Dollar Rate Slips into New, Narrow Consolidation Range as Viru…

31-03-2020 %HITS Euro to Dollar %AUTHOR

The Euro-to-Dollar rate is tipped for consolidation around its 200-day moving average after carving out what might be a new and narrow range which could dominate trading in the exchange.

Euro-to-Dollar Week Ahead: Charts Flag More Gains but Beware of a Doll…

29-03-2020 %HITS Euro to Dollar %AUTHOR

The Euro-to-Dollar rate closed out its best week for more than a decade Friday after a broad decline in the greenback gave other currencies breathing room, although whether the recovery.

Euro-to-Dollar Forecasts Hint of Parity Risks as EU Leaders Shun Agree…

27-03-2020 %HITS Euro to Dollar %AUTHOR

The Euro was a straggler on Friday but could face much more downside in the months ahead, according to downgraded forecasts from BofA Global Research, which are pointing to levels.

The Euro-to-Dollar Rate: A European Fiscal Response Could Put Long-ter…

25-03-2020 %HITS Euro to Dollar %AUTHOR

The Euro was steady on Wednesday as the Dollar remained subdued amid a large and coordinated U.S. effort to mitigate the economic threat posed by coronavirus although a European fiscal.

Euro-to-Dollar Rate Outlook Brightens on Fed QE as Virus Spread Slows …

24-03-2020 %HITS Euro to Dollar %AUTHOR

The Euro-to-Dollar rate outlook may have brightened now the Federal Reserve (Fed) is leaning against the greenback and German politicians are talking of post-coronavirus stimulus, which comes just as the virus appears.

Euro-to-Dollar Rate Week Ahead: Charts Warn of Move Toward Parity after 35-year Uptrend Snaps

The Euro-to-Dollar rate closed its worst week since May 2020 on Friday and snapped a 35-year uptrend in the process, leaving it vulnerable to further declines over the coming days…

Euro-to-Dollar Rate Under Pressure after ECB Squashes Yields With Mammoth QE Program

The Euro-to-Dollar rate was under intensifying pressure on Thursday following the overnight announcement of a mammoth European Central Bank (ECB) increase in the size of its quantitative easing program that…

The Euro-to-Dollar Rate’s Star Fades after Bonfire of ‘Shorts’ but Upside Bias Remains

The Euro-to-Dollar rate was testing support on the charts Wednesday and could now find gains are harder to accrue given recent volatility has cleared out ‘short’ positions that had leaned…

The Euro-to-Dollar Rate Week Ahead: Charts Point Higher and Multiple Analysts Tip Fresh Gains

The Euro-to-Dollar rate closed its worst week since the election of President Donald Trump on Friday after suffering a more-than 2% loss but it’s tipped by multiple analysts to outperform…

The Euro-to-Dollar Rate Is a “1.15+ Story” on Fed’s QE4, Says ING

The Euro-to-Dollar rate was digesting a European Commission coronavirus response package Friday but strategists at ING say the exchange rate will be a “1.15+” story if the Federal Reserve (Fed)…

The Euro-to-Dollar Rate Sinks as ECB Stimulus Gets Thumbs Down

The Euro-to-Dollar rate whip-sawed Thursday after the European Central Bank (ECB) announced a “comprehensive package” of measures to support an already struggling economy as authorities battle against a coronavirus epidemic…

Euro-to-Dollar In Retreat Ahead of European Central Bank Virus Response

The Euro was in retreat from the Dollar Thursday as attention turned to the March policy announcement of the European Central Bank (ECB), with many expecting a sizeable response to…

The Euro-to-Dollar Rate: Forecasts Upgraded at Nordea Markets as USD Hedging to Increase

The Euro-to-Dollar rate softened Tuesday as calm returned to markets ahead of an anticipated stimulus announcement from the U.S. although forecasts for the exchange rate have been upgraded by strategists…

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All Content © Pound Sterling Live 2020. The news and information contained on this site is by no means investment advice. We intend to merely bring together and collate the latest views and news pertaining to the currency markets – subsequent decision making is done so independently of this website. All quoted exchange rates are indicative. We cannot guarantee 100% accuracy owing to the highly volatile and liquid nature of this market.

EUR/USD Day Trades – October 10

Since I don’t usually trade until near the European/US overlap period, before any trades are made each morning I look back to see how the price was acting through the first few hours of the European session. That information helps me decide how I will trade the day. If it is choppy with hard to define trends I likely won’t trade at all. If there is trending movement, I want to be part of it.

Recently I have been working on a day trading strategy involving envelopes, the basics of which were outlined here in Forex Day Trades – October 07, and additional details will be provided in this and future posts.

Know the Trading Environment

This morning the envelopes, which are usually set to 0.01% on the EUR/USD 1-minute chart, were being constantly overrun earlier in the session. The trends were there and tradable, but the bands needed to be expanded a bit. Today I set them to 0.012%. While the increase in envelope width is very small, it equates to about a one to two pip difference. On longs that means I pick up the EURUSD at a slightly lower price, and shorts are taken at a slightly higher price. With the deeper retracements that occurred today, adjusting these was beneficial; if I hadn’t I would have been stopped out on the 1-minute chart trade.

I also did a 5-minute chart trade, but the standard 0.015% envelopes were working fine today.

1-Minute Chart Trade Example

EURUSD 1-Minute Chart

The trend is up and therefore looking pullbacks to the lower band. I had a buy order waiting at the lower band, and was filled on the bar with the arrow below it. A stop of 3.5 pips is always put out with the entry. Once the price began to move higher, the stop was adjusted to just below the recent low–reducing the risk to 3 pips.

Targets are based on Fibonacci extensions. Using our Fibonacci extension tool on the last wave up, it projects our profit targets for the current wave. Under most circumstances it’s either the 61.8% or 100% levels we use. I took profit near the former high at the 61.8% level for 4.5 pips. If you held to the 100% level your profit would have been 8.2 pips.

5-Minute Chart Example

If you trade on the 1-minute your spread needs to be very small, preferably using an ECN trading account. With the 5-minute chart the moves are a bit bigger so you can use a traditional account, but the spread still should be quite small.

EUR/USD 5-Minute Chart

Here was a trade where the trend had been down, followed by a nice rally off the low which makes a higher high. This gives us an indication that the trend may be shifting to the upside again. A buy order is waiting at the lower band with a 5 pip stop. The stop is reduced to 2 pips once the price moves higher.

I prefer taking profits near the former high, so I exited at the 61.8% level for 9.8 pips. Those that would have waited for the 100% level would have gotten 16.6 pips.

There is subjectively involved in this strategy. Being able to see when a trend is occurring and when it may be reversing is crucial. Indicators are not magic. Except for this strategy I rarely use indicators, since they have a tendency to take your eye off the one thing that really matters – price movements. If trading a 1-minute chart, flip back to a 5-minute chart everyone once in a while to see the overall trend. Most of your trades should be occurring in alignment with the trend on the 1-minute and 5-minute chart. Also, between 10 and 15 GMT is the ideal time to trade this strategy (that’s 1300 to 1800 on my charts above).

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