Forex Review: Closed Orders on GBP/AUD

Looks like I was a bit too conservative with my long entry on GBP/AUD as the forex pair ripped higher this week, leaving me in the dust.  Here’s a quick review.

Long GBP/AUD

Original Trade Idea: Forex Trade Idea: Long GBP/AUD

GBP/AUD 4-Hour Forex Chart

GBP/AUD 4-Hour Forex Chart

Not much go through here as the GBP/AUD went right into bull mode at 2.1100, possibly on the recent switch in broad risk sentiment to the downside on global growth worries. Since the Aussie is considered the “risk asset” between the two currencies, it unfortunately takes the brunt of the selling in situations like we’ve seen this week.

So, with that fundie support, buyers hopped in around the 2.1100 area (which is also just above the rising 200 moving average), pushing the pair to the strong resistance area around 2.1500.  With the market now 600 pips from my entry area, I’ve decided that I missed the boat on this one and I closed my entry orders to go long at 2.0900.  No trade. 

I’m still bullish on this pair because of the weak commodity and risk-off sentiment, but with the market now testing that strong resistance area, the probability of a profitable trade doesn’t look great at current levels.  I’ll sit back on this market to see if the rising 200 MA gets retested OR if that strong resistance area around 2.1500 gets broken before putting up orders to go long again.  Stay tuned!

  • Ken

    Crawler……buying above 2.1100 would have given you close to 1/1 R/R with your stop under 2.0850 and a target just before resistance at 2.5000.
    1/1 just isn’t good enough. This was a good non-trade. The only thing I saw and suggested in the original post was maybe waiting for a bounce and then putting the stop right below the last swing low.
    You might have been able to get in around 2.1150 with a stop just under 2.1100 and kept the target. That would have been better than 6/1 R/R but obviously very aggressive with the stop. I think that would have been acceptable, even if it turned in a loss because the reward potential was so high.
    Nothing ventured, nothing lost, live to trade another day buddy!