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Monday, 23 November 2009 GMT
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Chart of the Day: EUR/USD
Friday, 31 October 2008 06:26:46 GMT
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The markets have once again turned as the USD gains strength. The 4-hour chart of the EUR/USD is a good example of this as the market moved up to resistance and has now started to move down.
Selling a rally up to resistance when the market is in a downtrend is a classic trading opportunity. Aggressive traders may have already opened a sell position while more conservative traders using technical indicators like the MACD shown below, will wait for the crossover before opening a sell. In either case, protective buy stops should be placed above the high and the target to take profits should be placed below the entry and represent twice the risk. If you risk 200 pips, look for at least 400 pips in profit for a 1:2 risk:reward ratio.
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