Zigging and Zagging: Playing the Range on AUD/CAD – Profit Target Hit!

Trade Closed: 2012-12-19 23:15

AUD/CAD Chart

Late last week, I thought the Aussie was just about ready to deliver a killer blow to my trade and force AUD/CAD to break out of consolidation. I actually came very close to stopping out (10 pips away!) within hours of entering, but thankfully, the tides turned and the market finally started heading south at the start of the new week.

Now, the comdolls haven’t exactly been the strongest currencies over the past couple of days, but between the Aussie and the Loonie, the latter has been a much better performer. Word on the street is that Aussie traders are starting to price in another rate cut early next year, not to mention recent concerns about China’s growth. This basically crippled the Aussie, leaving it at the mercy of the Loonie.

Once the market began moving in my favor, I decided to make adjustments to my trade (as I had mentioned over Twitter and Facebook). I moved my profit target from 1.0330 to 1.0350, while setting my stop loss at breakeven at 1.0400. Just a few hours ago, the market hit my profit target.

Took profit at 1.0350: +50 pips / +0.625%

Phew! You have no idea how glad I am to end the year with a win (no matter how small), especially after missing out on so many opportunities over the past few weeks. But before I completely wrap up 2012, I’mma do my usual year-end review and give you my trading stats and thoughts for the year. Stay tuned for it!

Peace, thanks for following, and congrats to those who joined me on this wild ride, guys!

Trade Idea: 2012-12-13 01:00

Looks like I’ve missed out on all those great yen moves! Nevertheless, this just goes to show the beauty of trading the cross-currency pairs – there’s just so many of them!

Check out this simple setup that I found on AUD/CAD!

AUD/CAD Chart

The pair has been trading within a range of just 80 pips for the past three weeks now, bouncing between resistance at around 1.0410 and support at 1.0330. With price action now approaching the top of the range, this could be a good time to set up a short position. Besides, the holidays are less than two weeks away, and I don’t think we’ll see any strong breakouts, which should keep this pair in consolidation mode.

Looking ahead, I think the main reports that I gotta keep an eye on are the RBA MPC meeting minutes (next Tuesday) and the Canadian retail sales report (next Thursday). Both these reports can potentially wreck havoc in the markets, so I’ll have to plan accordingly if my trade is still open by next week.

For now, this is how I plan to play this setup:

Short at 1.0400, stop at 1.0440, take profit at 1.0330.

This should leave me with a pretty solid reward-to-risk ratio of 1.75:1. My stop loss is also quite a bit above the resistance line, so if price does hit it, it may signal that a breakout is in the works. As usual, I’ll be risking just 0.50% of my account on this trade.

If you guys have any comments on how you’d play this setup, hit me up in the comment box below. I’d love to hear from y’all!

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Q3 2012 Trading Performance Review
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  • Jonathan Weaver

    Bears are not strong enough to stop the AUD from rising so consolation happens, a break out to the top of this consolation will occur continuing in the movement of the main trend. ( just my opinion )