Trade #2: Quick M6E Long Scalp

I’m still expecting a EURUSD to push higher either this week or next. I think 1.11230 needs to be tested on the monthly time frame. But it’s important to not form a bias around this.

EURUSD 1-hour time frame

I’ve marked quite a few levels where long scalps are possible as we retrace the up-leg. The red level at 1.10729 is our first invalidation of higher time frame trend.

This trade did not go to plan, but managed to salvage a small profit. I had originally wanted to scalp long with 2 micro futures contracts (M6E) at 1.1129. First target was 1.1132, then move stop to break-even and let it run.

My entry was good. I targeted the 15-min level and got a nice reaction. I took profits as planned at 1.1132 and moved my stop loss to break even. This is when I realised there was some news coming out in just 3 minutes which can cause volatility. I also noticed there was no bullish follow through at this level so decided to take second profits at 1.1133 and close the trade.

I trade on M6E but chart the 6E as it’s smoother with more volume. I also look at the underlying EURUSD chart above to help identify key levels.

6E 133-tick time frame: Green circle bought 2 contracts, Red circles closed 1 contract

The origin of 1.11290 can be found by looking left at the leg we are retracing down. It is a swing-high of our low.

6E 512-tick time frame showing origin of 1.11290 level we traded
Ninja Trader Trade Performance Chart

Lessons

I have gained some confidence in my quick decision making skills. This clearly didn’t want to push higher and given the potential incoming volatility it was a good decision to close the trade early.

The entry and exit couldn’t have been more precise which also gives me confidence in my level identification ability.

Perhaps wait for a more significant level before entering as I really had no margin for error here. The 1-hour EURUSD chart looked very bearish and needs some significant accumulation before reversing.

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