Have a look on this 30 minutes chart of the EUR/USD

The pair were stuck in sideways channel with top of 13514 and low 13487 for almost 4 hours. So I put an order slightly above the top at 13518 hoping to catch a strong move up. My stop is the lower boundary, so it is quite tight. In fact I think that if my stop will be triggered I would change direction and short the Euro.

My target is 50 points. At the moment it is still quite and the price is around my entry level.

Update - I’ve been stopped out. At the beginning I gained 30 points but then the direction has changed. The lowest it went (at the moment) is 13483 while my stop was at 13485. It is now around 13500 so there is a good chance that my stop was too tight.

When I do day trading I am using tight stops. For example on EUR/USD I use 25 points stop loss.

Now have a look on today 30 minutes graph. It is very choppy and it goes from one side to another. That’s why I stayed a way. Otherwise I will be stopped out 5-6 times today and maybe hit my 50 points target twice. So I would be 50 points down…

If you use tight stop loss stay a way from choppy market! and if you use tight stops don’t even think to trade oil. It can jump 100 points in no time to each direction.

For weeks Shares magazine forex section  recommends to go against the flow and but the $. Each week their bottom line is buy the $ at 1.43 but the $ at 1.45 and so on. But the Euro had some other ideas and went all the way up to 1.51 but still shares magazine recommended against the Euro.

I don’t feel in a position that I need to catch the turning point. My idea is let it change and then jump on the new trend. But I do feel that something has been changed for the last 3 days.

Since Friday the Euro has lost a lot of ground to the green bucks and although the weekly chart is still positive the daily is already changed direction. Add to that a correction in the market and it seems that the direction is down for the Euro. It is too early to call but if the weekly chart will indicate that the trend has changed I am on!

That’s why I had a quick trade today on Rio Tinto and run a way after a quick profit. I know bought it at 3040 and sold it on 3060. I know it could easliy end the day around 3200 but on the other side it can finish around 2900. Yes I can use a stop loss but if I need to carry the trade to next week the stop loss could worth nothing if the market opens sharply lower.

It is the same with oil and EUO/USD… I am waiting to see. No mater what I won’t trade in the first half hour. If by then I will see a sharp move I may jump on the train (hopefully it would not be too late!)