Trade Closed: 2011-08-25 6:46
Well that was quick. Just a few hours after I opened my trade, the choppy markets threw me right out! I caught a nice entry, right at the bottom of the day’s range but I wasn’t able to make a gain on this long NZD/USD trade.
In fact, my account took a slight hit when my trailing stop was reached. You see, I was able to enter half my usual 0.5% position size at .8295 and another half at .8285. Price was moving sideways for most of the London session and I was getting pretty bored.
Once the U.S. session opened and the durable goods orders data was released, the pair jumped into action and broke above .8300. I was able to add another position at .8315 like I planned and move my stop to .8295.
At the time it seemed that the risk rally would be unstoppable since the headline figure printed a whopping 4.0% increase, way better than the expected 2.1% rise. Profits for Happy, ka-ching ka-ching!
Sadly, my happy moment didn’t last long. NZD/USD quickly retreated as traders came to their senses and realized that one good economic report isn’t enough to erase the ongoing problems in the global economy. As I mentioned in my trade idea, they’ve still have the Jackson Hole Symposium to worry about.
With that, my trailing stop at .8295 got hit and my account took a 0.16% dent. In retrospect, I probably shouldn’t have added to my position right away, especially since the markets have been extra choppy lately. Lesson learned.
How else could I have played this trade better? I know catching a decent entry price wasn’t good enough so I’d love to hear your thoughts on this trade and on my future ones as well.
Catch me through any of these accounts and I’ll try my best to reply right away!
Stay tuned for my comdoll weekly replay!
Trade Idea: 2011-08-24 7:26
After my pretty good USD/CAD trade last week, I’m back with another comdoll trade idea! Are you with me on this one?
While I was looking at my charts I found a possible day trade setup on NZD/USD’s one-hour chart. For one thing, the higher lows are forming rising trendline on the chart. The support area is even lining up nicely with the 50% and 61.8% Fibs! Yay!
And if you scroll back a little further, you can also see that my “shopping area” lines up with the neckline of last week’s inverse head and shoulders pattern.
Fundamentally though, I have little reason to root for the Kiwi. I’m hearing from my friends on Twitter and Facebook that risk aversion is still taking a hold of trader sentiment. Of course, it also doesn’t help the comdolls that Canada, Australia, and even New Zealand haven’t exactly been releasing positive reports this week. In fact, almost all reports out this week pretty much disappointed markets!
Still, with markets pricing in a disappointing Jackson Hole meeting this Friday, I think NZD/USD still has room to rise. My idea applies to a day trade anyway, so long-term fundamentals might not weigh as much on the pair.
In any case, I decided to enter at market (.8295) a while ago when I thought that the pair was indeed bouncing from the Fib support. I entered another 0.25% position at .8285 when it pulled back a bit, and now I’m risking 0.5% on this trade.
I put a tight stop on both positions since my trade idea is largely based on the Fib and bottom daily average range (.8270) support areas.
Lastly, I’m planning to close all positions at .8350 if the pair climbs to the level today. If not, I’ll adjust my stops and profit targets to minimize the potential impact of New Zealand’s retail sales report coming out at 10:45 pm GMT.
What do you think of my trade idea? Should I adjust my stops to minimize risk, or should I reverse my trade altogether?
Happy trading, everyone!