Best Comdoll Setup of the Week
Last week the currency pairs were as crazy as Friday night partygoers, and AUD/USD was definitely in the club! Check out the setup that would’ve been good for a total of 600 pips.
Remember when I tweeted about how AUD/USD touched parity early last week? As it turned out, it was the perfect entry point for the comdoll trade of the week!
If we had gone long at the 1.0000 super duper major psychological level, placed a 100-pip stop, and closed at 1.0400 early today, we could’ve gotten 400 pips. Of course, like any other pip-hungry trader, we could’ve maximized the trade and added to our position in the middle of the strong move.
In the chart we can see that the 1.0200 handle was a good place to enter as it was also a 50% Fib and it was supported by an oversold Stochastic signal. A 100-pip stop on the position would’ve added 200 pips to our position, adding up to a total of 600 pips with only a 200-pip risk. That’s a 3:1 reward-to-risk trade! And to think that I actually tried to short this baby early in the week. Tsk. Too bad news trading didn’t work for me. *sigh*
BFF: Best Forex Friend of the Week
But on to the good news, I found my new BFF this week? Would everyone please give happy snaps to…
My BFF over here got in touch with me and my friends through one of my Comdoll Corners where he shares his opinions and trade ideas on the comdoll pairs. In fact, one of the more memorable tidbits that he shared was that he lost 80% of his initial deposit in a period of consecutive losses. But that’s not the more interesting part – he also gained back most of it in a casino. Amazing, huh?
YoungGun1 revealed that his main trading strategy is being aggressive while still keeping risk under control. Oh, and you might be interested to know that he’s among the fanboys out there as he can’t trade without his iPhone and iPad. Where else can you find the latest quotes and news reports, right?
YoungGun1 advises his fellow trading noobs out there to get as much help as you can from anywhere you can. He says that the information given out by websites like BabyPips.com (yay!) is absolutely priceless. Lastly, YoungGun1 encourages us to be confident, to use our best judgment, and to stop being afraid (of losing).
Well, that’s it for my replay this week! Do you have any questions or thoughts that you’d like to air out? Don’t hesitate to give us a shoutout! You can post ’em thoughts on the box below, or on one of my uber these uber cool pages.
Till next time!
What moved the comdolls last week?
What another wild week it has been! The comdolls started off on a weak note as news of S&P’s downgrade of U.S. debt triggered a bad case of risk aversion on Monday. Traders got really spooked by the terrible news that they were able to push both AUD/USD and USD/CAD to parity the very next day!
However, the FOMC statement was able to turn things around. When the central bank announced that they will most likely keep rates at their current levels until 2013, traders began dumping the U.S. dollar. I mean, who would want to hold on to a currency whose interest rates are guaranteed to stay low for a couple more years?! It didn’t help that most market participants were starting to grow concerned about the possibility of a double-dip recession in the U.S.
Not even Australia, which was able to dodge a recession back in 2008, was spared from a slew of poor economic figures. Their economy seems to be weakening as Australia printed a flat home sales reading, a drop in consumer confidence, and worse than expected jobs data. Luckily for the Aussie, risk sentiment improved towards the end of the week.
Meanwhile, economic data from Canada came in mixed. Their housing market boasted of a 205K increase in housing starts for July while the June figure received a nice upward revision. However, the trade balance missed expectations and showed a 1.6 billion CAD deficit. Now that’s not good news considering how Canada relies heavily on its export industry.
Last but not least, the Kiwi was also able to pull up for a strong finish despite the lack of data from New Zealand. Probably took advantage of dollar weakness, I suppose!
Do you think the upbeat risk sentiment could carry on this coming week? I’m a bit worried because I just saw Forex Gump’s infographic suggesting the possibility of another recession. Let me know what you think!