Forex Trade Review: 2014-04-02
After sellers held the area above .9600 like a champ and a broad Kiwi sell off yesterday, it was time to exit this small “nibbler” currency trade.
Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.
Since I entered NZD/CAD long, the market made several attempts to hold above and break .9600, but the bulls just couldn’t do it (recent CAD strength played a factor). The pair had been consolidating up until yesterday, in which we saw a broad Kiwi sell off through out the day against the majors. To be honest, I can’t seem to find the direct catalyst for a turn around in sentiment on the Kiwi (maybe the weak HSBC China Mfg PMI number?), so I think it was more of a technical sell by forex traders taking profits or being more cautious on the Kiwi’s extended run rather than a real shift to bearish sentiment.
Whatever the case may be, the market was taken below the consolidation range pointed out in my original NZD/CAD trade idea, thus invalidating my technical reasons for being in the trade and stopping me out.
Total: -89 pips/ -0.25% loss
In hindsight, I don’t think there is anything I would have done differently; the market just didn’t push higher this time as the Kiwi rally may overextended. I recognized that as a possible risk in my original trade idea , which is one of the reasons why I went with a “nibbler” position than my usual 0.50% risk.
So, I take a very small scratch to my account trend playing the trend, but it just didn’t pan out this time. This doesn’t make me any less bullish on the Kiwi, but I’ll be waiting patiently for a pullback now.
What do you think about NZD/CAD? Or is there anything I could have done differently on this trade? I’d love to hear your thoughts, so please leave a comment below!