Debating a trade - CHF/USD 3 May 2011

by Eva
(from Forex Trading Beginner)

Click on the charts above to enlarge them

Tonight, I logged onto my charts and analyzed as usual. Then my telephone began ringing, with practically every family member wanting to have a chart about the week (Royal Wedding, Bin Laden and all that jazz)… 2 hours later, I finally get back to my charts and am a little miffed that I missed an apparently fabulous set-up on the USD/CHF. Or, so it looked. An inverted mallet had formed on the intersection of one of my Fibonacci lines and the trend line. This was 2 hours ago. However, the candles after this inverted mallet were bullish (green). And the candle before it was bullish (mallet). The trend was bearish.

It’s times like this I’m glad I also have the 30 minute chart and the 15 minute chart to fall back on. These give a more detailed picture of price movements in a smaller period, resulting in more candles and therefore more signals.

Then I opened the 15-minute chart and saw even more confusion, with some bullish signals appearing in the most recent price movements.

I have decided to stay out of a trade on this one, given that the signal was given 2 hours ago, not a lot of market movement has taken place in the direction I want, and there is a USD announcement in about 3 hours time.

Later... If I had taken that trade, I would still be in it. Not what I want when I generally enter a trade – I aim to be out within a few hours.

Conclusion: It’s better to “watch and wait’ than to rush into a potentially bad trade just because I’m getting itchy! The state of the current markets might be a little frustration, but I’m sure there will be some good opportunities soon.