Forex Review: NZD/CAD Long & EUR/NZD Short

I closed both of my trades in NZD/CAD & EUR/NZD before the end of the month, the former by trailing stop and the latter manually.  Here’s a quick trade review.

Long NZD/CAD

Original Trade Idea: Forex Trade: Long NZD/CAD on Pullback

NZD/CAD 4 Hour Forex Chart

NZD/CAD 4 Hour Forex Chart

Since my last blog update, I trailed my stop to .9390 (and tried to add another half position at .9450 with no luck) and then trailed once again to .9490 ahead of the Canadian GDP number on Tuesday.  Unfortunately, despite the negative surprise from Canadian GDP yesterday, the pair fell since the release, indicating the broad Kiwi weakness seems to be the main focus on this pair. My trailing stop was triggered on the pair, taking me out completely at .9490.

1st Half Position: +57 pips
2nd Half Position: +290 pips
Total: +174 avg./ +0.85% gain

In hindsight, closing my first half position early might seem like a bad move, but for me, that adjustment technique is something I’ll practice every time I head into big events. Sure, I may miss bigger profits sometimes, but because of the constantly shifting dynamics of the forex market, I’m going to focus on grabbing and locking in profits when I can.

I still have a slight upward bias on NZD/CAD, but for now, I’ll stay away because I see the bullishness in NZD starting to fade at the moment, which I’ll explain in the EUR/NZD review below.

Short EUR/NZD

Original Trade Idea: Forex Trade: Short EUR/NZD Downtrend

EUR/NZD 4 Hour Forex Chart

EUR/NZD 4 Hour Forex Chart

The picture has definitely changed on EUR/NZD with the pair’s downtrend stalling over the past few weeks.  It’s been a rangebound market between the 1.4300 to 1.4500 levels, possibly on recent data from Europe improving, or it could be the uncertainty on whether we’ll see a rate cut from the RBNZ with economic data looking okay, but a little bit of jaw boning that the Kiwi may be to high for NZ exporters to thrive.

In the short-term, I thought the potential positive shift in Europe and the uncertainty of whether the RBNZ would cut rates would keep EUR/NZD from making big moves one way or another. And with the end of the quarter coming up, I closed this trade manually and wait for another setup:

Total: +513 pips on half position/+0.64% gain

In hindsight, this was a pretty textbook trade that worked out pretty well, but I probably could have done better by adding on those pullbacks to what turned out to be the top of the recent range (1.4500 – 1.4600). But it was by that time where my uncertainties on the RBNZ kept me from wanting to take on more risk.

I’m still bearish on EUR/NZD, but I think I’ll wait for a retest around 1.4600 – 1.4800 before considering jumping back in again. Jumping back in at market here looks like a bad reward-to-risk for now with 1.4300 look like strong support at the moment.

Overall, I’m happy with both trades, especially since they saved my Q1 performance, and it goes to show that you gotta keep plugging away by taking high quality, high probability trades.  You never know when you can get back on a win streak.

Stay tuned for my quarterly review and until then, don’t forget to check out Happypip’s and Pipcrawler’s quarterly reviews to see how well they did to start out the year!