Comdoll Weekly Replay (April 4 – 8, 2011)

Best Comdoll Setup of the Week| 2011-04-11
If you have read my last AUD/USD trade, you would know that I got burned by the pair when I tried to short it early in the week. Apparently, the “broken rising trendline” that I spotted wasn’t broken after all. Boo!

Taking a look at the chart we can see that AUD/USD found support at the psychological 1.0300 handle, which is also right around the time when a bullish divergence popped up in the chart. What’s more, Stochastic was just leaving the oversold region! If I had only spotted this setup earlier instead of clinging to my trade idea, I could’ve made as much as 450 pips on these reversal signals.

AUD/USD Reversal

I could’ve bought at 1.0300, placed my initial stop 100 pips away, trailed it by 100 pips, and then added 1 position for every 100 pips (a 100/1/1 stop-trail-add strategy). Then, near the end of the week I could’ve closed the trade at the minor 1.0550 handle near the top weekly ATR. The strategy would’ve provided not only a 450-pip opportunity, but also a 4.5:1 reward-to-risk ratio. I bet I would’ve REALLY enjoyed my weekend if I was in that trade.

For now though, I’ll just keep on monitoring my comdoll pairs and watch closely for any good trade ideas. I know that I’ve already made progress on identifying good setups in hindsight, but now I have to work on my timing. Hope we all have the best luck with our pips next week!

Oh, and don’t hesitate to share some of your trade ideas with us. I know Enkhbat would also love to hear them (he said so in the comment box below). In fact, you can even reach me through Twitter, Facebook, and Meetpips if you have any ideas and opinions. I’ll be sure to relay them on my next post!

Till next week!

What Moved the Comdolls This Week? | 2011-04-09

Another week, another rally! Setting new records must be the hobby of gold and crude oil because they just reached new highs this week. Gold prices seem to be safely above the $1450/ounce mark while crude oil just breached the $110/barrel level. Is inflation about to heat up or what?!

Commodities rally

It does look like investors turned the risk-taking switch back on as they bought up the higher-yielding currencies this week. The economic calendar didn’t even have to churn out a lot of upbeat figures to keep the rallies going! In fact, Australia saw a couple of surprisingly poor reports (trade balance and home loans) yet AUD/USD didn’t seem to mind as it just breezed through the 1.0500 mark.

Meanwhile, USD/CAD easily drilled through the .9600 handle like it was made of styrofoam. The Kiwi is also reaching for new highs, after successfully landing above the .7800 level against the Greenback. I think Charlie Sheen can really learn a thing or two about “winning” from these comdolls!

While the comdolls went about their winning ways, my account suffered the exact opposite. You see, I attempted to predict a reversal by taking a counter-trend trade. Tsk tsk…

I’d like to share with you this quote that my fellow trader, foricks, posted on my losing AUD/USD short trade this week:

“The thing about trains is it doesn’t matter where they’re going, it just matters that you get on.” – The Polar Express

I think this quote really applies to gauging market sentiment. The ugly truth is that the market doesn’t really care what you think. And as more and more traders jump in on the ongoing trend, the stronger it gets. If there’s not enough reason for the trend to end, it’s best to just go with the flow.

While I learned this very important lesson this week, I can’t help but feel gloomy over the huge dent on my account. Good thing I’ve got some friendly followers on Twitter who cheer me up. Thanks for the kind words, everyone!

If you’re a Facebook kind of guy or gal and you want to see my posts on your feed, check out my fan page. If you’re happy and you know it, click on the “Like” button!

If you’re already in the loop, watch out for my update on the best trade setup for the week. These comdolls just keep going and going like an Energizer Bunny that y’all could be in for a 200-pip treat!

  • Enkhbat

    Thanks for post, i made three long positions on gold early last week. Comdolls, what do you think about gold rally, how long does it last? guys, if you have opinion on this gold rally, share yours :)hope next week is better for all of us:)

  • Enkhbat

    Thanks for post, i made three long positions on gold early last week. Comdolls, what do you think about gold rally, how long does it last? guys, if you have opinion on this gold rally, share yours :)hope next week is better for all of us:)

  • happypip

    Woah, you must be up by a lot now, Enkhbat! Congratulations!

    I think gold prices could keep rising because investors view that commodity as a hedge against inflation. Since price levels just keep climbing, more and more investors could buy up gold and pump up its value.

    Be careful though, gold is approaching $1500/ounce, which could act as a major psychological resistance. It might be best to lock in some profits there, but if you think that level will break, you could even add to your long position!

    Anyone else care to share their thoughts on whether this gold rally could last?

  • happypip

    Woah, you must be up by a lot now, Enkhbat! Congratulations!

    I think gold prices could keep rising because investors view that commodity as a hedge against inflation. Since price levels just keep climbing, more and more investors could buy up gold and pump up its value.

    Be careful though, gold is approaching $1500/ounce, which could act as a major psychological resistance. It might be best to lock in some profits there, but if you think that level will break, you could even add to your long position!

    Anyone else care to share their thoughts on whether this gold rally could last?

  • Jambooman

    If the US is able to control its trade deficit, gold will fall when US interest rate start rising. US interest rate will rise when the economy start overheating or inflation start rising. The fall in gold price then could be significant or permanent.

  • Jambooman

    If the US is able to control its trade deficit, gold will fall when US interest rate start rising. US interest rate will rise when the economy start overheating or inflation start rising. The fall in gold price then could be significant or permanent.