Happy morning, guys! After replaying what happened to the comdolls last week, it’s time for me to reveal my best comdoll setup this week!
Best Comdoll Setup of the Week
For most of last week my eyes were on AUD/USD, so it’s hard not to notice that it had presented a 5.63:1 reward-to-risk trade.
Taking a look at AUD/USD‘s one-hour chart, we’ll see that the pair tested a pretty strong support at 1.0675 many times in the middle of the week. However, the best trade setup didn’t show up until the pair formed a spinning top at the support, which lined up nicely with a bullish divergence, oversold Stochastic signal, and a potential double bottom pattern. Goodness, how could we have missed this trade?!
If we had gone long at 1.0675 when the pair once again retested the level later that day, we could’ve used a 40-pip stop-trail-add strategy. Then, we could’ve closed all our positions when the pair lingered at the previous high (1.0790). That would’ve given us a total of 225 pips and a 5.63:1 reward-to-risk trade!
As I’m on the other side of the trade last week, I really can’t say that I have taken advantage of this opportunity. Of course, that’s what this exercise is about after all. Hopefully I can spot these kinds of trades next time!
BFF: Best Forex Friend
On to the good news – I have a new BFF (Best Forex Friend)! I gotta admit I got carried away by the 4th of July celebrations last week, so I wasn’t able to give proper snaps to my BFF.
This week, please give warm, happy snaps to my BFF,
If you love swing trading then you’re gonna love @sgnemo! He says he prefers swing to day trading, mainly because he likes to sleep peacefully at night. He also says he usually complements his candlestick patterns with MACD.
Okay, before I get to chatty again, I should tell you that @sgnemo plays jazz music in the background to make him feel less jittery. What’s more, he also has a lucky charm! He shares that he keeps a jade piece given to him by his wife. Aww…
Aside from his numerous trade ideas on Twitter, @sgnemo goes on to share his two cents for the forex newbies. His advice? Newbies must trade with a strategy in mind (right on!). According to him, traders must have the discipline to pursue a strategy while using the right tools to trade.
He also recommends being open to others’ opinions. He cautioned though, that you must choose your trade buddies carefully. He said that there are many rogue traders, or professionals who put strong recommendations on the internet and tell you what you want to hear. Those who tell you the contrary are often the ones you can use as input to rethink your strategy, and this will be of great value.
Phew! Are those wise words or what? Thanks for sharing tons of tips with us, @sgnemo!
How about you? Got any forex tips or trade ideas to share? Don’t be shy! Who knows, you might end up becoming my BFF next week! It’s simple, really.
If you have the same enthusiasm to share and hear out others’ trade ideas and opinions as I and my BFFs do, then all you have to do is give us a shoutout on the boxes below, my Twitter or Facebook account, or even on one of my Comdoll Corners! How easy is that?
That’s it for me today! Keep in touch for my trade idea coming up this week!
What Moved the Comdolls Last Week?
Eep, I almost forgot to review what happened to the comdolls last week because I got so caught up with re-reading The Deathly Hallows, in preparation for the last installment of the Harry Potter movies this coming week. Don’t get me wrong though, the performance of the comdolls was just as exciting!
The Aussie was off to a weak start as Australia printed surprisingly worse than expected economic data. Their retail sales report came in way off the mark as it showed a 0.6% drop in consumer spending instead of the projected 0.3% uptick. Building approvals were just as dismal as it printed a whopping 7.9% decline. Now, I’m not used to seeing bleak figures like these from the Land Down Under!
This was probably why traders didn’t really expect the RBA to hike rates during their interest rate statement. As predicted, the central bank kept rates on hold and even gave a few dovish comments. On top of that, China decided to hike interest rates, which meant that their tightening moves could also restrict economic activity in Australia, one of their major trade partners.
Because of that, I took a bearish stance on the Aussie and decided to short AUD/USD this week. Unfortunately, that trade didn’t turn out as well as I hoped because Australia bounced back with a strong jobs report the next day.
And just like that, the comdolls made a nice U-turn mid-week as risk appetite came back in full swing. That was also when the ECB decided to hike rates, believing that the worst of the debt crisis is already over. The U.S. also printed an upbeat ADP jobs figure, leading traders to believe that the NFP report would also post a rebound.
Just like the Aussie, the Loonie was also able to stage a strong comeback during the latter half of the week. And why wouldn’t it? The top-tier economic data released from Canada then all beat expectations. Their Ivey PMI landed at 68.7, surpassing the 65.7 consensus, while their employment change report printed a 28.4K increase in hiring. Way to go, Canada!
You might be wondering why I haven’t said much about the Kiwi. Well, that’s because New Zealand‘s economic calendar was pretty much empty for the entire week! I guess that explains why the Kiwi merely bounced up and down inside a range for those days, except on Friday when it rallied after the NFP release.
Any guesses on which pair will qualify for my best setup of the week? Hit me up on Twitter, Facebook, through the comment box below, or my Happy Comdoll Corners for the Loonie, Aussie, and Kiwi if you think you know the answer!