Day Trade Short on AUD/USD – Trade Closed

Trade Closed: 2011-04-13 00:15 ET

Good afternoon to all you Asia session players! Here’s a review of my AUD/USD day trade as I only managed to snag just a few pips for the day. Check it out!

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary day trading blog here.

PCDPOD20110413.png

My trade was triggered not too after I posted my trade idea as AUD/USD grinded a bit higher into the US trading session. It actually moved up to the 61% Fib, where it stalled and created another divergence signal before moving lower.

With the pair approaching the WATR/DATR levels (1.0438), I decided not to add too my position as it was nearing the end of the trading session and we could see support at those levels.

It looks like buyers took back control there and the pair bounced higher into the Asia session, where I decided to close out my day trade for a tiny profit.

Closed position at 1.0472

Total: +18 pips/ 0.36% gain

In retrospect, the best move to exit the trade was to take it off for 1% gain at the WATR/DATR level with no further catalysts to spark additional directional movement. Also, if I wanted to be more conservative, I could have set my short orders right at MaPs (1.05). But overall, it was a good trade that I’m happy with; just gotta keep working on my exit decisions.

That’s it for now. I’ll continue to be on the lookout for another trade opportunity. And if WATR continues to hold on AUD/USD, I just may go long here! Stay tuned!

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Trade Idea: 2011-04-12 05:01 ET

Good morning! It looks like strong moves into the Greenback is the play of the day commodities take hit, especially gold and silver. AUD/USD took a hit today and after a nice bounce higher during the European trading session, it looks like the intraday trend may resume lower.

PCDPOD20110412.png

It’s a simple Fibonacci play on the 15 min chart. Couple that with the potential support-turned-resistance at the PDL/DO (1.0487) and we could see plenty of sell orders turning the bulls around. Finally, we have a divergence signal as stochastic is making a higher “high” against the lower “high” in price action.

Fundamentally, it seems the weak the surprise China trade deficit and weak forecasts from the IMF on future economic growth have sparked risk aversion, especially in commodities. This should continue to influence trade today as the US gets to price in the bearish views within a few hours.

So, I look to set my short orders at PDL (1.0490) and my target will be the day’s low at 1.0390. My stop will be right above at 76% Fib retracement level and just above the top DATR. This trade has a potential 2:1 R:R. Here’s what I am doing:

Short AUD/USD at 1.0490, stop at 1.0540, pt1 at 1.0390

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

Depending on how the price action goes, I may add to this trade and trail stop at 1.0440 if the momentum is strong to the downside or hold it into the next trading session.

Thanks for checking out my blog and stay tuned for more. Sign up above for our Twitter, Facebook, my email updates to be notified of my “Pick of the Day” right away, or check out my Twitter page as I like to call out levels to watch during the Euro/US session overlap! Good luck and good trading!

4 comments

  1. jjjpppjjjppp

    Aussie is a bit too strong at the moment, I tried to trade divergence on this pair twice last week, both failed.

    Unless commodities price and S&P500 off significantly, I doubt AUDUSD will drop much.

    Reply
  2. jjjpppjjjppp

    Aussie is a bit too strong at the moment, I tried to trade divergence on this pair twice last week, both failed.

    Unless commodities price and S&P500 off significantly, I doubt AUDUSD will drop much.

    Reply
  3. PipcrawlerPipcrawler

    Looks like you called it right, jjjpppjjjppp. Pretty lackluster day in the US session, so I just closed for a tiny profit. Thanks for the comment and checking out my blog!

    Reply
  4. PipcrawlerPipcrawler

    Looks like you called it right, jjjpppjjjppp. Pretty lackluster day in the US session, so I just closed for a tiny profit. Thanks for the comment and checking out my blog!

    Reply

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