A lot of action in the crosses this week, pushing my open forex trades in all kinds of directions. Time to review my closed GBP/AUD trade and my adjustments to lock in profits in my NZD/CAD and EUR/NZD positions.
Original Trade Idea: Forex Trade Idea: GBP/AUD Long
Since my trade adjustments to maximize my profit, volatility picked up big time for GBP/AUD, first popping above the declining trendline (and triggering my new long order at 1.9850) and reversing completely on fresh news from Australia (positive jobs data) and mixed U.K. trade balance data. So, my potential breakout turns into a fakeout, with momentum taking it down to my adjusted stop at 1.9500:
First half position: +100 pips
Second half position: -250 pips
Total: -75 pips avg./ -0.31% loss
It’s a small scratch to my account, but of course I’m kicking my self for not going with a break and pullback play rather than the straight breakout buy. Of course, it could have went differently, but knowing that Aussie jobs was coming up, I should have been a little more cautious.
Original Trade Idea: Forex Trade: Long NZD/CAD on Pullback
I definitely got lucky with this pair because things weren’t looking good for the Kiwi going into this week’s Reserve Bank of New Zealand monetary policy meeting. While there were signs of positive things going on, it was still a concern that the RBNZ may have to cut because of global growth and inflation uncertainties. Luckily for my long NZD/CAD, after both of my positions were triggered, the RBNZ came out bullish on the economy and made it clear that rate cuts are not needed at the moment. The Kiwi shot up across the board with potential rate cuts off the table, and my NZD/CAD quickly turned into a winner and then some in a short period of time.
With the pair now testing .9400, I’ve decided to lock in profits ahead of tomorrow’s Canadian employment data. This should be a market moving event for Loonie pairs, and with expectations of the unemployment rate ticking lower to 6.5% from 6.6%, this trade could against me pretty quickly like my GBP/AUD trade above.
So, with that thought, I closed my first half position at .9382 to lock in 57 pips and adjusted my stop on my remaining position to .9285 to lock in more profits and create a risk free trade. This adjustment will keep me in the game in case Canadian job disappoints but also locks in a minimum 0.35% profit, which happens to offset my GBP/AUD loss above. Hopefully, the trend remains and the pair keeps on moving higher.
Original Trade Idea: Forex Trade: Short EUR/NZD Downtrend
I’m glad I hopped on this downtrend at market because there have been no breather pullbacks on any euro pairs lately! And this might be one of the best pairs to play the euro weakness now with the RBNZ not looking to cut rates and because of the Kiwi’s positive interest rate differential with the euro.
Of course, I don’t know whether we’ll get a pullback soon or not, but with looking at the 4 hour chart above, we can see that the 1.4600 was a previous resistance level that is now broken. So if it does pull back, there’s a good chance that’s where we could see sellers stepping back in. With the weekend coming up, I’ve decided to lock in profits by adjusting my stop to 1.4670, just above that previously broken support level.
If the market does pop higher, I’ll watch the 1.4500 level to see if that major psychological level holds as resistance, and if it does, I may pop in another small position in that area. But as for now, I’ve locked in another +0.375% and created another “risk-free” with huge potential–the best kinds of trades!
Overall, one loss and two winners is not a bad haul so far for March, but we’ve still got a long ways to go with potential to maximize these trades if the driving themes remain the same.
Stay tuned for updates and adjustments, thanks for checking out my blog and have a great week!