Chip The Chartist - 2013-02-10 538x218

Chip The Chartist Weekly Report – 10-Feb-13

Two weeks ago I identified a “mini bubble” in EURGBP on the Weekly chart, see my report from 27-Jan-13 in the Blog.

In that report I defined how to get involved in this set up and now we have seen a Key Reversal on the Weekly chart I wanted show how that set up played out according to that report…

Chip The Chartist - 2013-02-10 - EURGBP 1 Hour Chart

GET INVOLVED

In my report on 27-Jan-13 (see Blog) I identified that EURGBP on the Weekly Time frame was interesting because of it’s extreme overbought condition – RSI(14) had not been above 70 in over 4 years.

Entry
As mentioned I was looking for an entry upon seeing strong technical selling evidence on the 1 Hour chart, preferably a breakout to the downside from a tight consolidation (over at least 10 candles (preferably more)) of around 20 – 40 PIPs.  After making a Lower High and then a Lower Low (where NITS Traders would have gone Short) this consolidation came and was then broken to the downside on Friday – See chart.

Stop
This was above the consolidation.

Target
Half profits (as it’s against the trend) were taken at equal Risk:Reward from Entry. This was hit within a couple of hours and now a Trailing Stop the same size (Original Stop – Entry Level) can be used.

A text book trade, it’s a pity they don’t all happen like this!

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DISCLAIMER & COPYRIGHT

This report is based on my analysis on my charting package. It may differ to yours as it can be affected by time, market movements, charting packages and broker prices. I accept no liability for loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on any information in this report or analysis.