- January 5, 2011
- Posted by: Ramki Ramakrishnan
- Category: Euro
Earlier today, I had suggested that there is a good chance for the Euro to recover from within the 1.3180/00 window back to above 1.3300. I had personally gone long just above the 1.3200 lvl and got stopped out. (No matter how confident one is with a view, a stop MUST be placed in the market because there are so many things that could go wrong). Very strong data from the US triggered lots of selling of the Euro, and we have already reached the 138.2% projection for the extending 5th wave. If we are lucky, the Euro will ease further towards 1.3100, giving us the chance to see if a long position can be taken around there tomorrow. Remember, extending fifth waves can make the trader lots of money, so long as he can spot the end of the extension in real time. My buy order (and the stop loss) was done while I was driving back home. Such chances are to be taken for smaller position sizes only because you are placing a blind order in anticipation of a normal move.
Also rememeber that extending 5th waves will be doubly retraced, which means even if we miss the first recovery from the bottom, we will usually get a 2nd chance to get on board! Let us see tomorrow.