AUD, GBP, NZD – Trading Week June 10th-14th

Observations, Ideas and Trades:
10th – 14th, 2013

Friday’s Trades:

  • 32 pip winner on GBPCAD.
  • Price had a straight 120 pip drop, then consolidated putting in a double bottom.
  • After the double bottom an impulsive bar up broke both structure and the 21 ema.  Seeing all of this, this was my signal to take a long entry.
  • I did have some concern that I was taking a long postion below the 1-hour 21 ema but I liked that double bottom, impulse bar breaking both structure and the 15-minute chart 21 ema, and my target was modest.  Though the stop:limit ratio was not favourable, just under 1:1.
  • Had price moved below the impulse bar any move back up close the entry, I would have adjusted the stop and look to exit with as small a loss as possible.  Price did not move below the impulse.
    • Update post trade: Price looks strong to the upside with a possible move higher to at least the double top.  However, unlike yesterday AUDUSD trade I am happy to have closed the full position at target.  That was the plan and sticking to the plan is preferable.  No need to get greedy.

Thursday’s trades, AUDUSD:

Post closed trade update, see third image, below.  Making arbitrary decisions, not following my plan, and not reading price action is NOT a good way to trade.  If I am going to trade and behave this way, I should stop trading and find something else to do.  I became short sighted and greedy closing the trade without a signal.  Acting arbitrarily, abandoning my plan, I missed out on hitting my original target, 48 pips lost.  I acted like this because I was afraid to lose the pips I had gained and stopped reading price behaviour.  I turned a good analysis and recognizing a nice set up into partial winner.

Yes, price was falling against the trade, but where did it fall to?  I should have known better and not let my mind believe price will fall further without a true signal.  That is, until it broke the 21 ema or a structure level.  Had I been patient and read the charts, I would have seen that on the 15-minute chart price did not touch the 21 ema nor did it violate any recent structures-this would have been the first obstacle for a move further down.

I closed the trade to preserve and keep what I had made.  The only certainty about forex trading is uncertainty.  If I cannot accept uncertainty then again trading might not be for me.   I need to let my winners run.  My winning trades are not only to make money, but to cover losing ones as well.  If I cannot realize the full advantage of my winners then my overall account will suffer.

Another option which would have been more ideal would have to close part of the position leaving the rest to play out.  This achieves both capital preservation and managed risk.

  • Yesterday evening price action was inconsistent within a 80 pip range, see circle labelled N.
  • Prior to the N labelled 15-minute bar priced dropped 40 pips then rallied back up 80 pips on the  next bar.
  • Price then dropped back down about 90 pips leaving a long wick to the top, bearish pin bar.
  • However, within all of this rapid price fluctuation a new LL was not set.
  • No newer low not being set is clue 1 that price may move higher.
  • The second clue is after not setting a new LL price moves and closes above the 21 ema on the 15 minute chart while, at the same time doing the same on the 1-hour chart.
  • The third clue is price breaking the resistance level at N closing above the blue rectangle.
  • Drawing a fib from f2 up to the high shows price holding support at .382 level.  The .382 level would have been an ideal level but I did not see it at first.
  • Looking back now, choosing f2 as point A for the fib retrace is valid as that is the beginning of the up leg after breaking the 21 ema.
  • As priced was approaching the top again I thought this will not be a double top and that price would break through it.  It did but I had to patiently wait a couple of bars before it made its move.  Though noting that the following two bars after entry did not make new LL.
  • Now I have to decide do I leave stops as they are or bring it to break even.  I will watch if price breaks the 21 ema down or if the former HH now turns to support?  At present stop is below the .382 level.

Wednesday’s trades, AUDUSD, part 2:

Long AUDUSD, Wed June 12thLong trade off 21 ema and structure resistance on Impulse Up bar

  • After yesterday’s evening HH level was set price came and closed below the 21 ema on the 1-hour chart.  But after stalling there for about 2 hours of trading price quickly moved back up over the 21 ema in two impulsive 1-hour bars breaking the HH level.
  • Noticing that the 21 EMA and the previous HH were aligned along with the .382 fib level. I took a long trade which at the time of writing is up about 24 pips and stops moved to break even.  Plus breaking the LH from Monday price action.
  • This is now a risk free trade.  I moved the stop to break even because the set up looks good and price should not come back down after moving up +24 pips positive money.  Also, the close of the 10am EST bar left a long bullish pin bar wick above the 21 ema.  This all suggest price has more upside but if it comes back down then it has more down side to go.  No need to lose money now.
  • First target is a double top with second target at a possible AB=CD pattern completion at fib extension levels (the parallel dash lines).

Wednesday’s trades, AUDUSD, part 1:

audusd trades june 12th
15 minute chart.  Wednesday trades on AUDUSD.  Note: The fib lines are adjusted to the present time.
  • Yesterday evening, after the big impulsive bar up setting a new HH, price retraced back to the 21 ema.  I took a long but did not like the slow side ways movement of price.  So, I closed it for a small gain.  Turns out there were more room for it to go down.
  • The the better long entry would have been after price came back above the 21 ema.  The earlier setting of a new HH should have suggest that the previous support at .94170 would hold and when price gets back over the 21 ema it becomes confirmed.
  • This morning, after adjusting the fib retrace from a previous LH to the recent LL I saw price stalling at the .618 level.  My first entry was above the blue line but closed it a for a quick small gain.  I closed it because I was not sure if the blue line would hold as support or price break through it.  Once price did choose a side, it broke through it I took short trades for about 24 pips in gain.
  • The target on this morning trades was last nights HH level.  This was quickly hit for a full position close.

Tuesday AUDUSD Trades:

  • Monday evening (Tuesday trading day) I took a short trade in the circle labelled 1.  I took the short trade as price had broken immediate area structure down and below the 21 ema line.  On the pullback toward the 21 ema I went short.
  • However, I was not patient and exited just before price dropped down to where I had limit level.  I was impatient as there were no upside pressure with price breaking structure and below the 21ema without coming back to it.  In fact,aftere break below the 21ema price dropped over 70 + pips.

    audusd trdes jun 11
    2 AUDUSD Trades. First was I was impatient without cause closing for small gain just before price took off to target. Second, I adjusted accordingly and minimized loss.
  • The short trade was targetting 50 pips which would have been easily attained before pulling back and touching the ema line.
  • My second trade on AUDUSD was this morning on a retrace up to the .618 level but I closed part of it for a positive 2.5 pips and the rest got stopped out.
  • I entered the short trade thinking .618 level would hold but was not liking the rhythm of price so closed part of the trade and lowered stops to reduce risk.
  • Unlike my EURUSD trade, I did not take another trade (long) as the daily and 4-hour charts are still in bear mode.

Close of Monday Daily Chart Update:

  • AUDUSD, At Oct 2011 support.
    • Priced gap down on the weekly open but finished the day up.  The daily low was the within a couple of pips of the October 2011 low, .9386.
      Other than being at a strong support level and an 88 Week low, the daily chart does not present a trade signal.  Possible short term resistance at .9529
  • GBPUSD, still inuptrend mode
    • Daily bar closed up but price at a resistance level, around 1.5597 with support around 1.54100 which is also around the .382 retrace level of current leg up.  Last week weekly bar was sharply up but closed below resistance level of 1.5597
  • NZDUSD, Still looking bearish
    • Like the AUDUSD it gapped down to open the week but the daily bar finished up but below resistance level.  Resistance is around .79400 with some support at .7808 or .7678
      Both Friday and Mondays daily bar closed below the .618 retrace level of June 2012 up to April 2013.

Monday 10am Update:

  • AUDUSD: Week opened with a gap down but price remaining inside opening 4-hour bar.  No signal
  • GBPUSD: Similar to EURUSD after the most recent rally up price looks like it is taking a break and forming a shelf around 1.55200 which is a short term .382 retrace level.  A more ideal long entry is around 1.54200
  • NZDUSD: 4-hour chart; after gap down to new LL price moving up but looking at resistance around  79.100.  Look for break of structure to the down side for possible short trade
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AUDUSD continues downtrend

audusd daily may 22
AUDUSD Daily Chart – Strong bear leg down nearing support of May 2012
  • AUDUSD continues downtrend and moves down another leg creating a new potential resistance region.
  • Look for price to Not get back up to .98382 for at least several days.
  • Next support area is likely .9581 which is the May 26th 2012 low.
  • Even though in a strong down trend be careful with shorts, no shorts inside previous days bottom wicks until price closes below.  Ideal shorting area, if price gets back to it would be a .618 of mot recent 4 hour down leg.
  • NO longs until a lower high has been set and taken out.