AUD/USD – Close Open Orders

Close Open Orders: 2008-10-28 15:30

No trade today as AUD/USD did not make another attempt to to go lower, instead finding buyers above .6000. Risk appetite grew across the board during today’s trading session as equities found buyers and after the Bank of Japan announces they will sell Japanese Yen to help their exporters.

So, no trade today as risk appetites may continue to grow in the very short term.

Close Open Orders. No trade.

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Trade Idea: 2008-10-27 23:32

comdollsff

Hello Everyone! We have a technical play setting up on AUD/USD that plays along with the downward momentum we are currently experiencing in the high yielding currencies.

I have a one hour chart pulled up on AUD/USD and it appears we have a descending triangle forming. This is a bearish pattern, especially in a downtrend, and with current sentiment still against the Aussie we might be looking at another leg down for the pair.

The main themes in this environment going against the Aussie continues to be carry trade deleveraging (selling higher-yielding currencies bought using lower-yielding currencies) and the rapid slowdown in global growth. The latter is especially damaging for the Aussie because as growth slows, so does the demand for raw materials (raw materials account for approximately 70% of Australia’s exports).

So, I’m looking to sell short on a break below the triangle. Here’s what I’m going to do:

Short AUD/USD at .6000, stop at .6200, pt1 .5800, pt2 at .5500

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

There’s no major news for the Aussie in the upcoming trading sessions, but we do have some data out of the US later, most notably the Consumer Confidence number at 10:00 am EST. Stay tuned!

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  • kbergner

    like the setup, was just wondering why you wouldn’t short at the top of the triangle since it is resistance. by shorting at .6000 arent you shorting at support?

  • kbergner

    like the setup, was just wondering why you wouldn’t short at the top of the triangle since it is resistance. by shorting at .6000 arent you shorting at support?

  • dailyearner

    seems this trading not worked.
    hope you can give us good iear the next time.
    anyway,thx for your post!
    come on !

  • barrooo

    I would think that with this trade you are looking for a break of the triangle support to enter so 6000 is just below support, on my chart 6000 was never broken, so wouldn’t have entered.

  • dailyearner

    seems this trading not worked.
    hope you can give us good iear the next time.
    anyway,thx for your post!
    come on !

  • therbcoe

    Jesus, you guys are harsh …

    kberger – (I) wouldn’t short at the top of the triangle because that’s not how the technical setup works.
    The strategy isn’t to short at the decending resistance line (the top of the triangle) but rather to short at the breakout of support line. I was wondering the same and then I remembered a few things I read on decending and acending triangle patterns. It’s best to short at the breakout of the support, not at the decending resistance line).

    If you DID short at the top of the triangle as you have suggested I’m sure you found yourself mo-lested by the forex beast.

    dailyearner – I’m not sure its the trading that didn’t work. “Trading” would indicate she entered the trade or even sent you a signal to enter the trade. If you follow the strategy you would see that the trade was most likely not entered/executed.

    barroo – thanks captain obvious

    everyone – LuvUBye!!

  • barrooo

    Thanks for your sermon rbcoe whe nare you coming down off the mountain

  • therbcoe

    Jesus, you guys are harsh …

    kberger – (I) wouldn’t short at the top of the triangle because that’s not how the technical setup works.

    The strategy isn’t to short at the decending resistance line (the top of the triangle) but rather to short at the breakout of support line. I was wondering the same and then I remembered a few things I read on decending and acending triangle patterns. It’s best to short at the breakout of the support, not at the decending resistance line).

    If you DID short at the top of the triangle as you have suggested I’m sure you found yourself mo-lested by the forex beast.

    dailyearner – I’m not sure its the trading that didn’t work. “Trading” would indicate she entered the trade or even sent you a signal to enter the trade. If you follow the strategy you would see that the trade was most likely not entered/executed.

    barroo – thanks captain obvious

    everyone – LuvUBye!!

  • barrooo

    Thanks for your sermon rbcoe whe nare you coming down off the mountain

  • therbcoe

    As soon as my tablets are finished …
    :-)

  • happypip

    Haha…thanks for the comments. So funny! love it!

    The standard way to play a descending triangle is to short on the break lower, so no trade today. On the same chart, we could have also drawn a falling wedge (which is a bullish signal), but I opted for the the triangle because of the trend and negative sentiment on the Aussie. I guess the RBA intervention and BOJ selling Yen won the attention of traders today.

  • barrooo

    I’d double dose if I were you

  • therbcoe

    As soon as my tablets are finished …

    :-)

  • happypip

    Haha…thanks for the comments. So funny! love it!

    The standard way to play a descending triangle is to short on the break lower, so no trade today. On the same chart, we could have also drawn a falling wedge (which is a bullish signal), but I opted for the the triangle because of the trend and negative sentiment on the Aussie. I guess the RBA intervention and BOJ selling Yen won the attention of traders today.

  • barrooo

    I’d double dose if I were you