Let’s start this week by looking at the end of last week. We mentioned that we are extremely cautious of Fridays. We generally don’t trade, or trade less, on Fridays.
For some reason, we have not had much luck with trading on Fridays. Levels that hold as support or resistance all week long crumble like dust in the wind on Fridays.
So, that being said, it happened again. We had used 1.8760 as support a few times last week, but had no faith in it for Friday’s trading. Fortunately for us, we stayed true to our guns and stayed out of the market.
As you saw, 1.8760 was broken like a wet tissue. We didn’t see any good reason for this, but reasons seem to matter less on Friday’s than all other days of the week. Maybe it’s the mad dash of traders trying to make those extra few bucks before the weekend or close out their positions. Who knows?
Ok, last note about Friday. There were several key support levels / indicators that we watch which were broken on Friday. That gives us good reason to look for a short today.
So, now on to today’s trading. Although some of our traders disagree with us, we are going to look only to play the short side of Cable today.
Our aggressive traders argue that 1.8700 is a good support level, and have taken long positions from there with hopes of a climb. Hey, to each their own.
We, on the other hand, are looking at resistance levels in the high 1.8700’s all the way up to 1.8800. There are more resistance levels at 1.8820, 1.8850, and then as high as 1.8890 – 1.8900.
It’s actually pretty slim pickings when it comes to finding a good stop price, so be careful.
This is another great time to mention that No Trade Is Better Than A Bad Trade. A bad trade is one when you don’t have all the important information. Make sure that you have all the levels necessary for a good trade – the entry, the stop, and the profit target.