Pick of the Day: AUD/USD
Today we have a daily chart of the AUDUSD:
As you can see the pair is in a downward channel. The top of a channel is a strong resistance point, and with the 200 SMA there as well it looks like the pair is having trouble pushing upwards and may turn downwards.
To get ready for a short trade let's take a look at the hourly chart:
As you can see, the pair is currently under the days' pivot point indicating it's time to go short.
I'm going to wait for the pair to close below the first support area to go short. This would clear us of the 1hr 200 SMA which can be a strong support area.
Again, with these trades I go for an intial 10 - 20 pips, but if you're brave enough, go for the S2 line @ .7459; a good 39 pips.
We'll place our stop above the channel and simple moving averages.
Remember, no matter how many pips you risk, make sure it doesn't add up to more than 3% - 5% of your account.
Always remember money management!
Now, CPI is coming out in AUS tomorrow at 7:30 pm EST. We recommend not trading around news reports, so 30 minutes before hand we will exit our trade or remove our entry order if it hasn't hit. Well, that's it for now. Hopefully the first one is a good one! Good luck and good trading!
Related Posts:
- Pick of the Day: USD/CHF 20:39 09 February 2006
- Pick of the Day: EUR/JPY 23:34 30 January 2006
- Pick of the Day: USD/CHF 22:23 22 February 2006
- Pick of the Day: NZD/USD 21:02 06 March 2006
- Pick of the Day: EUR/JPY 20:30 15 March 2006
Archived Comments (3)
Forex Blog: Pick of the Day
Hi Pipcrawler,
I think your trading method, with 2 TPs, is ingenius. For situation when the market position go down without hitting TP1 and TP2, do you recommend to execute 2 SLs or shall we have 2 SLs as well? Thanks in advance.
Hey palmoil, I'm not sure I totally understand your question. Is there any way you can reword it? Thanks
Hi Pipcrawler!
On the daily chart, the price failed to break the upper line of the channel and has been moving near it. Why did you interpret it as a signal for going short? I mean, one can also interpret it as follows. Since the price is moving near the resistance for a "long" time and fail to break it, it (the resistence) is not as strong as it was previously. So, there is a possibility of going long...