Comdoll Weekly Replay (May 16 – 20, 2011) – Best Setup

Best Comdoll Setup of the Week: 2011-05-23
Lovely Monday morning, friends! Since I’m in a good mood from my early morning jog, I decided to take a look at NZD/USD, a pair that I don’t normally consider for my best comdoll setup of the week. And surprise, surprise! I spotted a setup that could’ve given me 500 pips! It’s not an easy setup to spot though. Did anyone else see this one?

In my fundamental comdoll replay yesterday I talked about how the Kiwi remained strong even when its other comdoll buddies were taking hits against the Greenback. Well, that certainly showed on its 1-hour chart last week!

NZD/USD 1-Hour Chart

NZD/USD dillydallied just above the weekly average true range (ATR) early in the week, but it soon worked its way up when positive data started popping up from New Zealand. If only I had seen the bullish divergence that had formed with the price’s lower lows and Stochastic‘s higher lows, I probably would’ve gone long at Monday’s support!

If I had gone long at .7780 and used a 45-pip stop-trail-add (STA) strategy, I would’ve been in the trade until the pair reached .7970, which is just above the top weekly ATR. My trade idea would’ve had 5 positions by then, and I would’ve been stopped out with a 5:1 reward-to-risk trade. But if I had closed all my positions right at the top weekly ATR, my risk ratio would’ve improved to 11.11:1! How awesome is that?!

Whew! All these missed pips is making me hungry! Maybe I’ll prepare something hearty for breakfast. I’ll be back though, especially if you have questions for me, like what’s an STA strategy, what the heck is WATR, and yes, you can even ask me what I had for breakfast!

Don’t hesitate to ask me something or give trade ideas, okay? You can contact me on my @Happy_pip Twitter account, my Facebook page, or better yet, on the comment box below!

Till next time!

Happy time

What Moved the Comdolls Last Week: 2011-05-22
Confused, much? The comdolls were as indecisive as Rebecca Black when it comes to picking which seat to take last week. In the comdolls’ case, they played eenie-meenie with risk sentiment as they moved sideways for the most part.

The Aussie was off to a good start when it got a strong boost from the hawkish RBA monetary policy meeting minutes. Although the central bank didn’t hike interest rates in their most recent policy decision, the minutes of their meeting revealed that policymakers still had high hopes for the Australian economy.

Interest rate hike

The Kiwi was lucky enough to get a push from stronger than expected inflation data, when its PPI reports beat estimates. For the first quarter of the year, producer input prices reportedly rose by 2.2% while output prices jumped by 1.7%, their fastest pace of increase since 2008. Do I sense a rate hike on the horizon? Why, yes I do!

The Loonie didn’t fare as well as its mates as it got clobbered before the end of the week when Canada printed weak data. Canadian CPI fell short of expectations while consumer spending stalled in March. That was enough to make the Loonie erase its gains and end lower against the Greenback for the week.

That’s all I got for now! I’m off to enjoy a movie date with my girlfriends in a few. Gotta bounce!

Happy time

P.S. Watch out for the best setup of the week! Can any of you guess which one it is? Let me know through my Twitter or Facebook accounts. You can also comment below! Go on, don’t be shy.

  • Paddy B

    I am wondering what a Stop Trail Add strategy is?  :) 

    • happypip

      Hey @362b77831c6568f9b729fd719cb8567c:disqus ! A similar question was asked by @facebook-697175518:disqus so just check out my answer above. Hope it helps! Don’t hesitate to ask me if you have follow-up questions. I’m always happy to help a fellow trader out :)

  • Nader

    Well, at this point of time the triangle is finished :D and we took the 3 net line to the down side BTW 3 net line is a critical line @ 1.0568. i spoted that setup on the daily but i was focusing on EUR/USD and i’m in the money now sold @ monday open

    • happypip

      It does look like the bottom of the triangle is already broken, but the pair seems to be pulling up for a retest. Good job on your EUR/USD trade @660f83763f838bdbe1815e25ffd5fb0f:disqus ! 

  • Joshua Pearce Gibson

     1. Please explain the aforemetioned STA strategy;
    2. WATR = Weekly Average True Range(?);
    3. What’s for breakfast?

    • happypip

      1. STA stands for stop-trail-add and consists of three parameters. Let’s just call them X/Y/Z. X stands for the size of my initial stop, Y is the ratio of my stop I will trail, and Z is the ratio of my risk on my additional positions compared to my original one. So an STA of 50/1/1 means that I set my initial stop at 50 pips, trail it by a full 50 pips, and risk another full position when I add. An STA of 100/0.5/0.5 means I set an initial 100-pip stop, trail it by 50 pips, and put half of my original position size when I add. Hope that clears things up!

      2. Weekly Average True Range represents the pair’s average weekly movement based on the ATR (Average True Range). In my case, I set the indicator to 20, which means that it tracks the pair’s average movement for the past 20 time periods (20 weeks). I add half of that value to the week open price to get the upper WATR and subtract half of the ATR from the week open price to get the bottom WATR. These upper and lower limits usually serve as nice reversal points!

      3. For breakfast? Hmm. Maybe just milk and cereals. I’m always on a rush during the mornings that I don’t even have time to cook a decent meal, haha.

  • Rana_yousuf2003

     hi is there any update on aud/usd descending triangle and the support at 38.2 retrecment?

    thanks.

    • Nader

       hi Rana you from Egypt,nice i didn’t know that ladys in egypt trade financial markets :) but that’s ok if you want to contact with to discuss trading i will be so glad

      cheers,
      Nader

    • happypip

      Thanks for the comment, Rana_yousuf2003!

      Do you mean this descending triangle that I pointed out last week?

      http://www.babypips.com/blogs/

      Right now AUD/USD is right at the major support at 1.0500, which is the 38.2% Fib that you mentioned. Although Stochastic is on the oversold region, last Friday’s daily candle also turned out to be a doji, and there’s also a big chance that risk aversion will continue to be the name of the game for the rest of the week.

      I have a bullish bias on the pair in the very long term, but I’m still not sure in the short term. What do you think? :D

      • Nader

         What is the long term bias of you Monthly ??
        that’s bcuz on the daily it’s bearish sell of with SMA40 start pointing down.

        • happypip

          Monthly?! Wow, that’s really long LONG term, huh? Stochastic is already giving the overbought signal on that time frame, but it hasn’t fully crossed downwards yet. I’m thinking buyers could still pus the pair a bit higher before it falls back down. 

          • Nader

             hi happy pip, :D well today i got stopped out on break even on EUR/USD after a big move of 146 pips and pulling back up in a stretching slow rally my 5 (1 ATR) daily traget no1 doesn’t match, its ok i’m happy with that.
            good trading for you all

          • happypip

            Oh well, break even is better than a loss. Better luck on your next trades!

          • Nader

            Thnx happypips, i hope you a winner next trade :) and keep it up if there is thumbs up here, 1 for you

            happy trading