Another AUD/USD Short Trade? – Trade Closed

Trade Update: 2011-11-15 1:34

AUD/USD strikes back! Just when I thought my AUD/USD curse was lifted and I’d be able to score another hundred or so pips with the pair, I got stopped out. Not only did it break my heart, but it broke several resistance levels as well!

AUD/USD Trade Update

As you can see from the chart, AUD/USD surged back above the 1.0200 resistance area that I pointed out and went all the way up to 1.0300 before the week ended. As it turns out, Greek and Italian lawmakers inspired a risk rally when both countries announced a new set of leaders.

That was enough for the pair to break above the symmetrical triangle I drew, leaving me frustrated about that downside fakeout. Boy I really do need to review the lessons on trading breakouts and how to trade fakeouts in the School of Pipsology!

Anyway, here’s the damage on my account:

P/L: -100 pips / -0.78%

I really REALLY need to bounce back this week, so won’t you help me out? Pretty please? Holler at me through any of these pages or through the comment box below:

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Chips, dips, and goshdarnit, I want those pips!

Happy time

Trade Update: 2011-11-11 1:48

Enough watching by the sidelines, it’s time to enter some trades! After the 1.0200 resistance held for AUD/USD yesterday, I decided to enter at market instead of waiting for more favorable (but has less chances of getting triggered) retracement levels.

AUD/USD Fib Retracement

I ended up entering at 1.0165 since I decided to wait for a bearish candle to close on the 1-hour chart. I also placed a 100-pip stop loss, which is just above the higher Fibs that I pointed out yesterday. Meanwhile, my first profit target is set at parity but I plan to move my stop to breakeven once price falls below 1.0100.

I know my profit target is a bit ambitious considering that I have an interesting relationship with AUD/USD, but I learned from my last AUD trade that I have to risk it to get that sweet biscuit. For those who haven’t read it yet, I could’ve ended up with at least twice my 100-pip win if I hadn’t closed my last trade early. Boo!

Again, here are my trade details this time:

Shorted 0.75% of my account at 1.0165, SL at 1.0265 with my first PT at 1.0000.

Sounds good, too ambitious, or too safe? Watcha think?

Trade Idea: 2011-11-10 6:07

Thanks to my recent 100-pip win with AUD/USD, I’m no longer scared of trading this pair. I might’ve missed out on a few pips by closing my recent short trade early (okay, it’s a lot of pips actually, more like a couple hundred) but I’m ready to try again! Here’s the setup I’m looking at:

AUD/USD Short Again!

There’s a head and shoulders pattern that formed on the 4-hour chart and, unless my eyes are deceiving me, I think AUD/USD already made a break below the neckline. I’m too scared to just jump in, knowing that Aussie bears could still use a breather after that strong selloff the other day. With that, this baby could still pull back to a few resistance levels I’m watching.

I’m crossing my fingers that AUD/USD would retrace to the 1.0200 level, which is in line with the previous week low and the bottom WATR. Then again, the pair might not climb that high, especially since word through the grapevine is that the COT report turned net bearish on AUD/USD.

On top of that, fundamentals aren’t really the Aussie’s best friend right now, are they? Data from Australia has been missing expectations as they reported poor trade balance figures and another decline in job advertisements. Although their October jobs data came in line with expectations, weak figures from China are hinting at a future slowdown. Did you see that massive drop in China’s annual inflation and their bleak trade surplus? I bet the High Expectations Asian Father meme would find those very disappointing!

Add to that the ever-present debt concerns in the euro zone that continue to hurt risk appetite. Last I heard, Italian bond yields jumped above the 7.0% threshold, suggesting that the land of pizza and pasta might need a bailout soon. Now that’s gonna be difficult considering Italy is euro zone’s third largest economy!

With that, I’m waiting to short AUD/USD again but I still haven’t completely figured out my entries and targets just yet. For now, I’m keeping a close eye on the ’50s and ’00s in case AUD/USD finds resistance there. Oh, and I’ll be watching those candlesticks carefully, too! Thanks for the advice Mario!

How about you? Any advice on how I can improve on this setup or work on my trading in general? Let me know through any of the accounts below:

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Chips, dips, and let’s get those pips!

Happy time

  • forexnoob

    hello Happy..i’m with you on this one..however, its safe to wait for some retrace then only we jump in..what do you think?:)

    • happypip

      Hello there, forexnoob!

      I agree with you on waiting for a retracement. Are you planning on entering at the higher Fib levels? 🙂

      • forexnoob

        well, i’m planning to wait if there is any breakout at previous week low..and then only i’ll decide..but if this trade really work as you planned it, we gonna dance all the way girl..:)

        • happypip

          Awesome. For now it looks like it’s stalling at the 1.0100 level, but I’m hoping it goes down all the way to parity. Fingers crossed :))

  • Digital Gypsy

    Let me know the details 😉

    • Nihalbhat

      if it gets above 1.03 clearly a short.

  • Mario

    Hi Happy Pip,

    I’m planning to short on this one too if the price retraces back to the 61.8% fib (price: 1.02369) that I’ve drawn in the daily chart. On top of that, I’ll also be waiting for a bearish candlestick confirmation before I’ll pull the trigger. 🙂

    We will see! 🙂

  • Kioniboy

    ye im in too think its going to hit 1.0200 and bounce on back down under 1.0100 🙂

    • danbld

      use caution, good news from us, i think a little bit higher….

    • happypip

      Aaaaaand you’re right! Did you make any pips with your call? 🙂

      • Kioniboy

        yep made a good few 🙂

  • Mario

    The price is currently retracing back to 1.2368 (61.80% fib that I’ve drawn in the daily chart) that I’ve mentioned earlier. 🙂

    Correct me if I’m wrong but I think it would be risky to enter a trade now since market will be closed this weekend and we will never know its opening price on Monday. 🙂

  • Jay

    I would not choose to go in at this stage due to the risk benefit ratio because the price is hovering at a support level drawn from 3 March 2009 to 6 August 2010 and another at 17 march 2011 and 8 Sept 2011 on the daily chart and also it’s in the oversold area on stochastic.

  • Merritt Herschell Wynton

    Hey Happy Pip, I must say this idea in general was very decent.
    In my opinion the 1hour chart has a lot of noise so anything could happen. But the trade idea in general was very good! One thing bothers me however, where did you find the basis to use a 100 pip stop loss? The stop loss seemed unnecessarily high to me..
    I would’ve placed it just above the high.