I’ve got orders open on AUD/NZD & CAD/JPY and with both making moves, it was time to make my own moves to hopefully catch a few of those pips.
Original Trade Idea: Trade Idea: Short-term AUD/NZD Short
Thanks to last week’s mostly risk-friendly sentiment, the trend lower on AUD/NZD ended up being the real deal as forex traders bought up the higher-yielding New Zealand dollar. But it looks like my entry order at 1.0825 was a little too extra conservative to have me hop on what was a nice move lower.
With the pair already hitting my max target and beyond, and approaching a strong support area that last drew in buyers from October 2015 through February 2016, the potential risk-to-reward of hopping in for an extended move lower doesn’t look like a good trade. I decided to close my open orders to short quarter positions at 1.0825 and 1.0900. No trade.
In hindsight, it’s pretty obvious that I should have played the round numbers as my entry (as I usually do) instead of trying to squeeze in a few more pips to improve my R:R. From now on, I think I’ll stick to that entry technique as a hard rule.
Original Trade Idea: Forex Trade Idea: CAD/JPY Rising Wedge
Decided to chase this pair lower after sellers took control at the Fibs drawn on the four hour chart above, which was also the 85.00 major psychological handle. Even though I didn’t get in at my most desired price levels, the potential reward-to-risk is still desirable for at least a short-term trade. And we could see some bearish moves from the Loonie this week with the Bank of Canada meeting coming up, especially with Forex Gump pointing out weak trade & consumer spending in March, and let’s not forget the Canadian wildfires likely putting pressure on upcoming GDP reads.
So, I decided to close my orders to short at 86.00 and opened up a half position short at market (83.15), max stop at 86.25, and max profit target at 79.25.
Again, I’m only risking 0.50% of my account on this one, and with this trade structure, I have a potential reward-to-risk ratio of just under 1:1. Of course, anything can happen in the forex markets, so if the story changes I’ll be sure to reassess and adjust quickly if necessary. Stay tuned by following me on Twitter and Facebook!