I mentioned yesterday that I am hunting for long position at SP500. Still there is a resistance at that area, but sentiment seems to be bullish, so I decided to go long. It was a good decision, but today in the morning I was not so sure about that. Lucky for me, it turned out to be ok. I’ve entered long position, because there was a correction down to 50% retracement level, and in the same area was a 50 moving average. I like it very much when this things comes together because it gives a better chance for success. It is like having few independent advisors who work for you.
Below you can see a 4hour chart of SP500:
I close half of my position at 118 extension, because I am still not sure what will be next. This is a common practice in my trading. I divide my trade into few parts and I like to close half or at least one third at first important resistance. In that case that important resistance was 118% extension. I took my profit, but there is still some open position left and if move will continue up, I am gonna earn from it.
This was a good, strong move and there is a chance for continuation.
Same situation was at eurusd. When you look at 4hour chart you will notice that last correction ended on 200 simple moving average and on 61.8% retracement level. This was also a great place to enter a long position, since price was already above 200 sma. From that level eurusd moved up over 170 pips! How great is that? You have to be fast with this kind of moves, but still – it was great. You can see it below.
Interesting things are happening right now at the markets. If the nice trends will be with us for longer, than we should have some great investing opportunities. Of course there is a chance of strong crash and you should be aware that this is only a correction in the eurousd pair. As I like to say: always protect your profit…