With a bit of luck, my GBP/AUD trade shifted into the positive after buyers quickly hopped in around 1.9400. Time to adjust with the market now hitting potential resistance.
Original Trade Idea: Forex Trade Idea: GBP/AUD Long
On the four hour chart above of GBP/AUD, we can clearly see the bulls buying without hesitation once the market got to the first Fibonacci retracemant level at 1.9400. That’s where my half position entry order was triggered and the market moved higher, likely a slight mix of a broad bounce back in Sterling, forex traders getting out of the Aussie on weak Chinese data, and maybe a little bit of risk aversion thrown in.
Whatever the case may be, the pair is now retesting the falling trendline, so with the potential for a reversal, I’ve decided to make a few adjustments to reduce risk and take advantage if the market does break above the falling trendline. Here’s what I did:
Closed half position buy at 1.9000
Opened half position buy at 1.9850.
Set all stops to 1.9500.
This locks in some profit in case the market makes a complete reversal from the falling trendline, and if it does break, I add to a winning position to increase my potential reward on the trade. In short, I’ve locked in a small profit, but if it keeps going my way and my next orders are triggered, I’ll have a small amount of risk on (0.31% of my account) but a much better potential reward than what I currently have now.
As for my other trades, it looks like both buy orders have been triggered in my NZD/CAD long, my EUR/NZD short continues to linger around a major psychological support area, and EUR/GBP has dropped a few hundred pips so I’ve closed my short orders on EUR/GBP (No trade).
And with the Kiwi taking a hit in the last few sessions, I’m not too worried about overly dovish jawboning by the RBNZ at their upcoming monetary policy meeting, but of course anything can happen and I’m glad I’ve got stop orders up and standing pat.
It’s all up to the market now and well see how it all plays out in the next couple of trading sessions. Stay tuned!