With the weekend approaching, I decided to make a few adjustments to my open forex trades and trade orders based on this week’s events.
Original Trade Idea: Swing Short Setting Up on Cable?
Thanks to the combination of a dovish Bank of England meeting minutes and the ECB quantitative easing announcement pushing forex traders into Greenbacks, there was no pullback to be had in Cable higher this week. The pair is currently testing the 1.5000 area, so I’m going to step away from this trade by closing my open short orders at 1.5385 and wait to see how forex traders handle this major psychological area. No trade.
I’m still fundamentally bearish on GBP/USD and will consider shorting on a sustained downside break of 1.5000 if it happens.
Original Trade Idea: Swing Forex Short on NZD/USD Range
NZD/USD never even thought of moving higher on the week as the market went into bear mode, both on USD strength and in slight reaction to the surprise Bank of Canada rate cut this past Wednesday. I’ve decided to close my open orders at .7900 with that level so far away from the market now, but I’m still short biased on this pair in the short-term. I think throwing on nibbler shorts here in this area makes sense, but I’ll wait for a move back up above .7500 before planning out my next move.
Original Trade Idea: Shorting GBP/NZD into Downtrend
It was a “perfect” textbook technical short setup, but the surprise Bank of Canada rate cut changed the game on this trade by pushing all of the comdolls lower against the majors. It’s very likely that I will get stopped out on this trade, but based on the potential R:R at this point, I’m just going to leave it on and sticking with my current stop. Because I’ve already accepted this as a loss, the possibility of this area holding and reversing far outweighs the couple of small percentage points it has left to go. And even if I’m stopped out, this market still looks like the downtrend hasn’t been invalidated. I’m still short biased and would look for another short entry if I got taken out of this one.
Overall, on the trades I should have went short at market went my way, where the trade I should have been conservative went against me but still looks valid. Funny how that works out sometimes. I still haven’t lost that GBP/NZD trade yet, but this whole week is definitely one to review and learn from this weekend. Until next week, have a great weekend!