Yen let me down, Aussie bailed me out

Since trying to climb Mount Fuji in the currency markets earlier this week left me rolling down the side of the mountain, I decided to act on a setup that I saw on the Aussie dollar.

Thinking that weakness in the USD might continue into the end of the week, and noticing that the Aussie was showing strength, I placed an entry order on the 50% retracement of the reversal leg off the bottom.

 

 

The halfway back entry is something that I picked up from watching Tim Racette's videos over at Eminimind. He trades mostly Euro and S&P futures, but I've had good success using this entry style on many different currencies securities and stocks.

 

Basically, when you see a leg that's moving in the direction of the trend you want to follow, find the halfway back point on that leg, and use that as your entry point. I then use the 72% retracement area as a stop. If I'm using a targeted trade, I look for 2 times my risk, but often I'm looking to enter a trend, so no immediate target is placed.

 

On this particular trade I had no target initially, but after running for nearly 185 pips, I just banked the profits, and I plan to reevaluate entering a longer term entry next week.

 

Drop a comment if you use halfway back for entries, or want to discuss your own entry strategies.

 

STT