Equity futures were up, but reaching some resistance. I could see the scenario where price opens higher and continues up, but since there was so much resistance, I could also see a scenario where they begin to drop pretty quickly. When I looked at the baskets, I did so with both scenarios in mind. I ended up having 14 pairs to look at (which was a bit overwhelming) so I broke them up into categories based on where the market moved.
When the markets opened, they had gapped up, and actually made a slightly new high since the initial recovery back at the end of May. Not wanting to miss out — thinking it was a breakout — I looked through my list of “risk on” trade ideas and settled on NZD/CHF. NZD had made new highs above a trend-line (though it was pulled back off of those highs at this time) and CHF had just broken a pretty major level of support that’s lasted since mid-June.
This chart looks like an upside down version of CHF’s basket, with a large candle pushing through resistance. On the 15 min. chart, there was a decent base forming, and right up just above the next resistance level there was just over a 1.5 R:R offered. I might’ve stretched the numbers to fit a little, but i didn’t want to miss the breakout, so I set an entry order.
Entry – 0.6209
This broke out of the range and started to head up, triggering me into the trade.
| Entry Order Level |
|---|
| 0.6209 |
| Stop Loss Level |
| 0.61815 |
| Target Level |
| 0.625 |
Exit – 0.61805
Equities didn’t push much higher, only making a new high by about $5 before dropping again. The markets didn’t go anywhere and my trade didn’t go anywhere. Eventually, I had to go to bed. I checked the charts at about 5:15 this morning and I was close to being stopped out, but wasn’t yet.
When I woke up, things had recovered slightly and I was down about 50%. I thought “hey, maybe the markets will break out after-all”, and left the trade in. The market’s didn’t really go anywhere today either, but they gapped down and were down from yesterday, and this dropped enough to stop me out just before noon.
