Dollar Index Trade
Here we will observe a Dollar index trade. We will look at a 60 minute chart for the June contract of the USDX.
We have seen the value of the US dollar rise dramatically over the past few weeks, and especially the paste few days. What I am attempting to do is pick a top, which is tricky business. The use of protective stops is absolutely necessary. What I am observing on the 60 minute chart is an MACD divergence top. As prices achieved new highs, the MACD moving averages and histogram have been steadily declining for two days. As a result of this situation, I am led to believe that upwards momentum is peetering out and a downward correction is due. At least, this is what I believe for the short term. Again, protective stops are required in case of opposing price movement.
Trade entry was at 20:35 at 82.47. I'll be using a trailing stop as to protect against loss and sustain profits, if there ever are any. My time frame for this trade is short term. Probably hours, maybe through the day tomorrow so long as things move in my direction.
In other matters, I am still waiting to enter into a long position in sugar futures.
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