Comdoll Weekly Replay (May 23 – 27, 2011): 300-pip NZD/USD Trade Setup

Best Trade Setup of the Week

Aaaand the Kiwi takes the cake for the best trade setup last week! Just as I mentioned in my Facebook page, the New Zealand dollar went for the Ki-WIN as it jumped by more than 300 pips against the Greenback.

Here’s the setup that could’ve given me 300 pips for the week:

NZD/USD Retracement Divergence Trade Setup

You know how they say the best things in life come in threes? Well, it sure looked like this statement applied to NZD/USD. The pair retraced to the 50% Fib, which lined up with the .7900 handle. At the same time, a divergence formed when the price made higher lows while Stochastic made lower lows. Fib retracement + major psychological support + bullish divergence… That’s a yummy combo right there!

Of course I had to check if that setup met the 9 Rules for Trading Divergences and it sure did!

Had I taken that trade and gone long at .7900, I could’ve added at the break of .8000, another psychological level. Since Kiwi strength was in style for the week after China announced that it would invest in New Zealand, I could’ve also placed buy stop orders above the pair’s recent highs around .8100 then locked in my gains at the .8200 level.

Here’s one possible scenario for this setup:

Long at .7900, initial stop at .7800. Risk 1% on this initial position.
Add at .8020, move stop to .7900. Risk another 1%.
Add at .8120, move stop to .8020. Risk another full position.
Close all positions at .8200.

This would yield a 3% gain on my first position, a 1.5% gain on my second position, and a 0.8% gain on my last position for a total of 5.3% return on the entire trade! Since I’m still hurting from my recent losses, I typically risk only 0.5%, which means that I could’ve still bagged 2.65% on this NZD/USD setup.

Why oh why do I miss these things?!

Was I too busy shopping for clothes during the end-of-season sales that I wasn’t able to spot this nice bargain on NZD/USD? If I’m about to miss out on another one again, don’t hesitate to bug me through my Twitter account. I’m counting on you, folks!

Happy time

What Moved the Comdolls Last Week?

Happy morning, friends! Are you ready to know what happened to the comdolls last week?

Just when we were about to stretch our trading muscles at the start of the week, commodity-related currencies like the Aussie, Loonie, and Kiwi were all dragged by risk aversion, mixed commodity price action, and worse-than-expected economic data from China, a big trading partner for commodity-related economies. The Aussie fell the hardest in a month, while the Loonie and the Kiwi also marked losses against the Greenback. Boo!

Around the middle of the week we saw the comdolls stage a Barcelona-like win against the dollar when risk appetite improved in markets. Of course, it didn’t hurt that inflation expectations were higher-than-expected in New Zealand, which sparked expectations of another interest rate hike. Goodness, NZD/USD even reached a three-month high during the week!

Kung Fu Panda

For the rest of the week the comdolls continued to climb the charts with the Kiwi leading the way. Though the Aussie also continued to inch higher, its performance wasn’t as awesome because economic reports in Australia inspired mixed sentiment from markets. Meanwhile, the Loonie also struggled to contain its gains as Canada‘s exposure to the U.S. economy held back the Loonie bulls from dragging USD/CAD below its weekly open price.

I promised to take my nephews to see Kung Fu Panda 2, so that’s it for me today! Tomorrow I’ll be posting my best comdoll setup before I leave for the Memorial Day sale (I’m eyeing that patterned skirt I saw last week), so you better watch out for it! If you have any questions on commodities, comdolls, or anything about trading, don’t hesitate to hit me up on my @Happy_pip Twitter and on my Facebook.

Oh, and since I’m trying to win the “Best Aunt Ever” award today, do any of you guys have suggestions for another good movie? I’m thinking Pirates, but I’m not sure…

Till tomorrow!

Happy time

  • Jp Caron

    Pirates is my choice toooooooooooooo Should go together means 3D. I am asking mysefl about comdolls i think for sure now! means comodities. So why New zeland???? does that means if we produce wine, meat, fruit, etc… is commodities??????

    • happypip

      Hey Jp!

      My nephews were too tired to see Pirates, but thanks for the suggestion! :)

      As for commodities, I mainly look at gold and oil prices since many traders are also looking at those them, and they are highly related to Australia and Canada, which are big producers of these commodities.

      What’s your question about New Zealand again? I think it got lost somewhere between Pirates and fruit and wine. Heehee :D

      • Jp Caron

        Thank’s for your answer? i am trying to understand why you seem to treat NZD like a country with commodities as canada and aussie.
        Ok what is New Zeland as to do with commodities? for ex: Swissy…  have a lot of gold in banks so i threat them as commodities.
        D’ont worry for pirates i like opera too!!!!!!!!!!!!!<3
        JP

        • happypip

          Oh I see what you mean! New Zealand dollar is part of the comdoll gang because 1) it’s strongly correlated to the Australian dollar since Australia is New Zealand’s number one trade partner and 2) New Zealand is an export-driven economy, which means that changes in prices of commodities have a strong impact on New Zealand’s growth. Hope that clears things up!