AUD/USD: Short at 1.0700? – Stopped out at break-even

Trade Update: 2011-09-02 06:03
Oh no, not again! My trade was going so well but it ended up getting stopped out. And here I thought that the top weekly ATR and the previous day high was already broken.

As it turned out, the 1.0750 handle was just too strong a resistance for the pair. Good thing I was able to move my stop to breakeven just in time!

AUD/USD stopped out

It’s probably all for the best. I didn’t plan on holding on to this trade until the non-farm payrolls release because that could lead to some wild dollar moves. Plus, I did mention that this long AUD/USD trade was meant to be just a day trade.

Still, I can’t help but wish that I was able to make a few profits on this trade instead of ending up with absolutely nothing at all. Then again, thank goodness for proper risk management and I was able to avoid another dent on my account.

How could I have played this setup better? Should I have just stuck with my original short trade idea? Let me know what you think!

Holler at me!
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Happy time

Trade Update: 2011-09-01 6:500

After seeing poor ADP figures from the U.S. and better than expected Australian retail sales data, I decided to switch sides and go long AUD/USD instead. Hey, a girl’s entitled to change her mind, right? I’d like to call it BEING FLEXIBLE, ha!

Just like in cheerleading, it’s important for a trader to be flexible. But don’t fret; it’s not as impulsive as you might think.

A few hours ago my Twitter friends and I watched Australia’s retail sales and capital expenditure report. Since the U.S. ADP report printing only a bit better than expected, I figured that Australia’s reports might provide more volatility for the pair.

And what do you know – Australia’s reports actually came in better than expected! Retail sales went up by 0.5% in July, the first in three months, while the seasonally-adjusted private capital expenditure ticked 4.9% higher in the second quarter. Adding to that the Chinese PMI report that missed expectations by just a hair’s breadth and we got ourselves a comdoll frenzy!

AUD/USD day trade

Okay, maybe not exactly frenzy, but it’s enough for me to buy at market! I got in at 1.0690 at the release of the report, and now I’m just waiting for the pair to clearly break yesterday’s high and the top weekly average range (around the 1.0720 area) before I think of adding to my position. In any case, I’ve already moved my stop loss to break even when the pair reached 1.0732 a couple of seconds ago.

Do you think my plan has merit? It’s been so long since I have won an AUD/USD trade so I’m watching this one closely. Don’t hesitate to put up your advice, okay? I’m sure I’ll appreciate it!

Here’s where you can reach me:
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Waiting to hear from you,
Happy time

Trade Idea: 2011-08-31 6:22

I think I need to muster the guts to trade this comdoll pair that hasn’t exactly been good to my account. Yep, that’s right, I’m trading AUD/USD again! Check out my short trade idea and tell me what you think:

I spotted a nice technical setup on the pair’s 4-hour chart as it neared the top of its average weekly range. Stochastic has already been in the overbought area for quite a while now, with a bearish divergence to boot! To top it all off, there seems to be a rising wedge on the same time frame and the upper trend line is right in line with the 1.0700 major psychological handle.

AUD/USD swing trade setup

With a sweet deal like this, what’s a girl to do? Should I give in and short this pair right now?

Of course not. I decided to be a little more careful and figure out whether there are any economic catalysts that could mess up my short trade idea. Lo and behold! The economic calendar showed that there are three event risks for the Aussie tomorrow namely the Chinese PMI, Australian private capital expenditures data, and Australian retail sales.

All three reports are projected to post improvements over the previous month’s figures but, if we see worse than expected results, AUD/USD could be in for a strong midweek reversal.

I’ll also be keeping close tabs on U.S. economic data, such as the ADP non-farm employment change and the ISM manufacturing PMI. Would another round of disappointing U.S. data trigger risk aversion? Well, we’re about to find out soon, aren’t we?

So, are you with me on this trade or do you think I should tweak a thing or two in my plan?

I plan to jump in a short trade at market IF AND ONLY IF the reports tomorrow come in below consensus. I’ll be aiming for the week open price (1.0575) for my first profit target and I’ll trail my stop on the remaining position.

Since adding to my position didn’t work so well in my past two trades (USD/CAD and NZD/USD), I probably won’t do that again for this trade. Still, with a 75-pip stop, my potential reward-to-risk ratio is looking really sweet!

As always, I’d love to hear your thoughts on this trade of mine. You know where to catch me:
@Happy_pip Twitter
Playing with Comdolls Facebook page
Happy Pip Comdoll Corners
MeetPips.com

Looking forward to talking to ya!

Happy time

31 comments

  1. ascms

    I am glad to see you switched.  I was going to suggest that yesterday, but I had a really difficult time trying to post my comment.

    Reply
  2. Personal Me

    I have just closed my long Aussie positions due to my vacation. Hoping the best for you Happy Pip! Personally I also dont like to short this pair. It is not because the trend but merely because the rollover hehe.

    PS: I like your words “I decided to be little more careful.” :)

    Reply
    • Happy Piphappypip Post author

      Hahaha, learned my lesson. Thanks @google-6e807d834890522b80a3dd569b59dd0e:disqus ! Hope your vacation went well :)

      Reply
  3. Foricks

    I like the trade in theory, but I hate shorting this pair – especially this time of year.  I see your bearish divergence and actually have an entry order at 1.0580 which is the bottom of the channel.  Good luck!  I’m rooting for you.

    Reply
  4. ani

    For a day trade the tp was too much I believe.  We could have played better by reducing the tp to 35-40 pips which is about 1/3rd of daily hi lo range.

    Reply
  5. ascms

    Happy Pip,
    Franly I don’t know why the pr dropped.  I checked all my technicals and could see no reason for the drop.  The 200sma was under the pr on the 1 & 4 hr charts as well as the daily, in additon on the 1 hr it was on the upswing which usually indicates an uptrend.  Perhaps it was market sentiment due the $ being sold off against the CHF.

    Reply
    • Happy Piphappypip Post author

      It was most probably because of the weak US NFP report, which triggered risk aversion in the markets. Traders didn’t want to hold on to their higher-yielding risky currencies and they bought up the safe-havens instead, including the US dollar. 

      Reply
  6. Adeel

    The pair keeps testing the 1.0724 Resistance level.   I shorted it.  The pair tested 1.10760 as a high and .99265 as a low in early Aug.  It hasn’t broke through the 1.0724 resistance since early July. 

    Reply
  7. Stephen Oatley

    I’m not sure changing direction is right move but I also share Foricks sentiment about shorting the Ozzie. Looking at price action on the daily chart the last two daily candles are spinning tops and today’s is forming a similar candles although with HL. Today’s candle is looking suspiciously like failed move to the upside this will be confirmed at NY close and if this is case I may short Ozzie. Waiting on the sideline…

    Reply
    • Happy Piphappypip Post author

      Yep, I was kind of worried about those spinning tops on the daily too. But I’m planning to just hold on to this one as a day trade and I’ll be closing my position really soon. I don’t wanna have it open during the NFP release!

      Reply
  8. Digitalgypsy5720

    It’s a good thing you didnt lose any money but suck that you werent able to make a profit either :-/
    Well, at least you can trade another day which is ALWAYS a good thing :-)

    Reply
  9. Autoxn

    Nice view!  I am thinking the next few days will be down with the up trend continuing there after.  The overbought and possible negative divergence scare me away from going long at this time but I will have a long trade in at 1.0630 with a target of 1.0800.

    Reply
    • Happy Piphappypip Post author

      I changed my bias and went long on this pair also because of the better than expected Australian data. 

      Reply
    • Muyaad

      i’d seen it as u saw it and i am already in the trade based on tech only, i didn’t put a lot of weight on fundamental. i only plan to break-even prior to those reports. i got in @ 1.0700 and will limit out @ 1.0600

      Reply
      • Happy Piphappypip Post author

         Cool! Did you move your stop loss to break even already? I think it popped up above 1.0700 a few minutes back. If not, where’s your stop loss? Price is nearing the top weekly ATR (1.0723) :D

        Reply
    • Happy Piphappypip Post author

      Yay! Hope you’re also waiting for AUD data though, it looks like the dollar is weakening against comdolls right now :)

      Reply
  10. Adeel

    I kept it short at 1.0724, and today it’s trading at 1.0653.  I’m keeping it short but there are some strong support levels at 1.0585 which is where I expect it to bounce again some time.  I’m just a novice so don’t pay too much attention to what I’m saying…but here’s what’s curious:  all I did was the S&R analysis via ICT.  I’m surprised as to how well his simple plan really holds up.

    Reply
    • Happy Piphappypip Post author

      Nice! Well risk aversion seems to be the dominating theme lately so AUD/USD could still have a lot of reason to drop. Good luck on your trade!

      Reply

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