AUD/USD: Buying at Major Support Levels – Trade Closed

Trade Update: 2011-06-14
As I mentioned in my Comdoll Weekly Replay, AUD/USD had a 300-pip run last week. Unfortunately, my long trade was on the wrong side of the fence. That’s another loss from trading AUD/USD! Boo hoo…

Good thing I came across a video of Hugh Jackman and Neil Patrick Harris duet at the Tony Awards. That definitely pumped up my happy vibes after this frustrating loss!

You see, I set my stop below AUD/USD‘s previous week low so that I’d have enough leeway for my long trade. Apparently, my stop still wasn’t wide enough. Price dipped close to the 1.0500 major psychological handle, threw me out of the trade, then jumped back above 1.0600 yesterday. Arrrrrrghhh!

AUD/USD Chart

The Aussie seemed to have a fighting chance when my trade got triggered. However, the weak Chinese trade balance released last Friday was probably too much for the Aussie to bear. I just wish I had set my stop at 1.0500 so I’d still be in this trade and up by a few pips.

How else could I have played this trade better? Should I have locked in profits early? Should I have moved my stop to entry right away? Share your thoughts with me on the boxes below, or even on @happy_pip Twitter and Facebook. I could really use your help right now! *sniff*

Till my next trade,

Happy time

Trade Update: 2011-06-10
Good morning guys! Just wanted to let you know that I got triggered on my trade yesterday!

As it turned out, AUD/USD bounced off WATR in the U.S. session while the ECB President Jean-Claude Trichet was making his “strong vigilance” speech. My trade got triggered, and the pair shot up to above the 1.0650 minor psychological handle.

AUD/USD Chart

Then, just when I thought that I could finally get started on my all-organic morning snack, we saw the pair edge down back to the major support level that I pointed out.

Good thing that the odds are lining up in my favor again! Aside from making a potential inverse head and shoulders pattern on the 1-hour chart, Stochastic is also showing an oversold signal. What’s more, I’m seeing a slightly bullish divergence too!

Let’s see how this trade plays out. As some of my friends pointed out, the pair could still fall below my stop loss level. I hope it goes above the 1.0650 handle to break the head and shoulder neckline, but I still plan on watching this pair closely in case more of my bullish setups get invalidated.

Anyone here with me on this trade? Share your trade ideas with the rest of us by hitting me up on the boxes below, or on my @Happy_pip Twitter and Facebook accounts!

Oh, and watch out for my comdoll replay post this weekend, will ya? I have a surprise for my BFFs. My best forex friends, that is!

Happy time

Trade Idea: 2011-06-09

This is it, friends! I’m taking another shot at AUD/USD! Do you think that a bounce from psychological levels will save me from another loss?

I know it’s not easy to keep on logging in trades after losing consecutively, but thanks to Dr. Pipslow’s empowering trade advice, I now have the drive to just keep on trading.

This week I decided to take another shot at trading AUD/USD because I spotted the pair lollygagging around a pretty good support area. You see, not only is 1.0600 a major psychological handle, it’s also lining up nicely with yesterday’s low and last week’s low! What’s more, a bullish divergence and an oversold Stochastic signal are just waving a big buy signal.

AUD/USD Chart

On the fundamental side of things, I have faith that the Aussie will get its swagger back sooner or later. After all, the RBA did mention in its recent rate statement that the Australian economy is growing strongly.

Just yesterday, Australia printed a stellar 4.8% increase in home loans, twice as much as the estimated 2.4% climb. However, their jobs report released earlier today turned out to be a disappointment when it showed a mere 7,800 increase in hiring. But hey, an increase is still good, right?

Well, at least the Australian economy seems to be doing much better than the U.S. Heck, didn’t the U.S. just print a bleak NFP figure last week? Aside from that, Uncle Sam’s trade deficit is expected to widen from 48.2 billion USD to 48.6 billion USD in April. I’ll keep an eye out for the actual data due 12:30 pm GMT today, along with the U.S. initial jobless claims figure.

As I learned from my past trades, I should stay constantly vigilant about any shifts in market sentiment, especially while my trade is open.

This is why I’ll also be tuning in to the BOE and ECB rate decisions today to see if they can affect risk appetite. In fact, I think I’ll just read up again on Forex Gump’s article on the upcoming rate decisions this week.

In any case, here’s what I plan to do:

Long AUD/USD at 1.0610, stop at 1.0540, profit target at 1.0750
Risk: 0.5%
Potential reward to risk ratio : 2:1

What do you think? Are my entry and stop levels safe enough? Don’t hesitate to give me advice on the box below! If you’re the shy type though, you can also hit me up on my @Happy_pip Twitter and Facebook pages!

Waiting for your opinion,

Happy time

  • bota

    why did you put that psychological level at 1.0589?

    • happypip

      Oh, that 1.0589 was the previous week’s low that’s why I labeled it on the chart. My “line in the sand”, actually. That’s why I set my stop a few pips below that level.

  • MedicalChew

    I agree with ani. A bearish flag is pretty apparent there, and bouncing up and down just below a former (already?) support perhaps. I rather not touching the Aussie for now. I think it’s in crappy consolidation on the longer TFs now.

    I’d say go for a short on the Fibre as it probably exhausted with a double top possibly in the making, but it’s no ComDoll =(

    • happypip

      Good to hear from you, MedicalChew!

      I just got triggered! Weee!! You’re still right about the higher time frames though. Must…watch…closely!

      Do you have any trades with other comdoll pairs? Looks like USD/CAD is moving pretty strongly :D

      • MedicalChew

        I spot an ascending triangle on USD/CAD 4h. I’m looking to straddle play it if time permits.

        • happypip

          Yep, I’ve been looking at USD/CAD’s ascending triangle too.

          Let’s see if the pair makes any more big moves for the rest of the week. Right now a downside break provides a good reward-to-risk ratio, but we’ll never know what the markets throw at us!

          Oh, and that’s too bad about the potential lack of time! Are you a part-time trader? :D

          • MedicalChew

            Aye, aren’t most of us on BP are? Or is this not a newbie hangout? ^^
            Why I’m still part time?I’m struggling to consistently make money, all I’m doing is successfully maintaining my account at +- 10% of its initial bankroll past few months. Definitely beats busting an account though.

            Are you a full time then?

          • happypip

            Hey congrats on more or less maintaining your balance! I remember reading from the School of Pipsology that tons of newbie traders blow up their account in a short amount of time.

            Don’t worry, just keep doing what works for you, and I’m sure you’ll consistently make money in no time :)

  • Maxiv

    set this trade order up but with a stop @ 1.055

    • happypip

      Cool! I’m glad there are more Aussie bulls out there, Maxiv! I just placed my stop loss at 1.0540 just in case 1.0550 holds. Hihihi.

      Fingers crossed for our trades! Do you have any other trades on today? :D

    • Maxiv

      …which has just opened…. lets hope for the best….

  • Parminder Jawanda

    20 sma is  acting strong resistance on 4 hr chart

  • Mattspips

     Looks like a great setup to me, we may see another pullback to the 1.0500 level, which is also a fibonacci level and previous support/resistance area, so if you get stopped out here, don’t hesitate to get back in near the 1.0500 area for another long! I’ve got my take profit at 1.070, and my stop loss at 1.055, I just took this long trade so I got in at 1.059.  Lets bring back the solid AUD/USD rally – go carry trade!

    • happypip

      Haha, my friends and I are thinking of the carry trade too!

      I’d still be careful about my biases though. If I get triggered on this order, I will watch my trade closely. If it drops below last week’s low again and market sentiment is bearish for the Aussie, I’ll probably pull the trigger early.

      Hope our trades work out! Is AUD/USD your only trade for this week? :D

      • Mattspips

         No I’ve made a few others this week, I currently have a few open, EUR/USD, NZD/USD and USD/CAD at the moment. 

        Long EUR
        Short NZD
        Long AUD
        Short CAD

        I usually like to only hold onto trades for a day or two.  Did your AUD trade just get taken?

        • happypip

          Whoa, you do love the comdolls, do you? :D

          Yep, I just got triggered! It’s retracing a bit though. Now I’m thinking wondering how I can stop myself from watching this trade too closely and closing it impulsively :(

          I was looking at NZD a few hours ago too. I bet you got some serious pips from that :D

  • Steve44MCaUSAFX

    Avatar Test ONly, Please Ignore.

  • aniroodh

    CAN U OBSERVE A bearish flag formation here right now
    ani

    • happypip

      Hey Aniroodh!

      Yep, I’m also seeing the flag. It looks like it’s still ranging though, even when price action in other dollar pairs as crazy as the party I went to last night.

      Hopefully the bottom weekly ATR and the major psychological handle is enough to scare of the Aussie bears for now. In any case, I’ll be watching the pair closely too.

      Thanks for sharing your advice, Aniroodh! I really appreciate it :D