Short NZDUSD: Going with the Flow! – Closed All Positions

Closed All Positions: 2011-11-24 2:19

Woah! I wasn’t expecting that weekend gap up from NZD/USD but it’s a good thing I moved my stop to breakeven on my remaining position. I’m also patting myself on the back for not being extremely ambitious with my first profit target. Because of that, I was able to lock in 50 pips or a 0.35% gain from this trade.

NZD/USD First PT Hit

In retrospect, I probably should’ve exited my entire position at .7400 knowing that the markets could get crazy once U.S. traders come back from their Thanksgiving holidays. Then again, that was a tough call since risk aversion was really strong at that time. I was even thinking that NZD/USD would gap DOWN over the weekend!

Here’s how my trade ended up:
P/L: +50 pips / +0.35%

Not bad, eh? Do you think I could’ve played this better? I’d love to hear from you and you know where I’m at!

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Let’s score more pips this week!

Happy time

First PT Hit: 2011-11-24 2:19

Yipee! Thank goodness I decided to go with the flow on my NZD/USD trade. After closing at break even on my USD/CAD trade last week, I finally have a winning trade!

NZD/USD First PT Hit

Yesterday while I was helping out my sister prepare her gazillion side dishes, I was keeping one eye on my NZD/USD trade. You see, I was expecting that more bearish news would come out of the euro zone and maybe take its toll on the comdolls.

Lo and behold, Fitch decided to downgrade Portugal’s credit rating by a notch to BB+! Not only that, I heard that Angela Merkel also stood firm in her lack of support for euro zone bonds or even more ECB involvement. The news inspired some selloff for a while, but the hype soon died down as the lack of trading volume discouraged many investors to commit to a position.

In any case, the short-term selloff in high-yielding currencies was enough for NZD/USD to reach my first 50-pip profit target at .7400. Now I just have to worry about my second position, which already has its stop loss at break even.

Today no major reports are due from the U.S. so I just have to focus on the euro zone debt drama and the Parliamentary elections in New Zealand. If I start to see good news from the euro region or if New Zealand’s elections went better than analysts were predicting, then I would probably take profits early.

Here’s what I have for now:

First position: Closed with +50 pips in profits
Second position: Still open with the stop loss at break even and pt at .7250.

Should I tighten my stop, add another position, or take profits early? As always, tips are very much welcome. You know where to reach me!

Trading slow, with the flow, and hopefully hitting PTs two in a row!

Happy time

Trade Idea: 2011-11-24 5:59

My, oh my! The comdolls aren’t doing so well lately, huh? This week I’m planning to go with the flow and ride those downtrends with this short NZD/USD trade idea. Let’s start with the technicals…

As you can see on the chart below, NZD/USD has been stuck inside a falling channel on its way down from .7700 to .7400. Right now, it looks like the pair is giving me a chance to hop in the downtrend because it looks ready to test the top of the channel again. Oh, and have I mentioned that it lines up with the 50% Fibonacci retracement level and the .7450 minor psychological mark?

NZD/USD Falling Channel

But wait, there’s more! I’m also seeing a nice bearish divergence on the 1-hour time frame as the pair made lower highs while stochastic made higher highs. I better take a quick peek at the 9 Rules for Trading Divergences before entering my orders!

As for the fundamentals, it seems like the risk off environment is here to stay unless we see any positive updates from the euro zone. You see, economic reports have taken the backseat for a while as most market participants zoned in on the growing possibility of debt contagion. They didn’t even react to New Zealand’s better than expected trade balance, which showed that their deficit narrowed from 789 million NZD to 282 million NZD in October.

One thing that I do have to take note of is the prospect of higher volatility during the Thanksgiving holidays. With that, I should give my trade enough breathing room to withstand those potential wild moves. Check out my trade details:

Short NZD/USD at .7450, stop loss at .7500, first profit target at .7400.

I will risk 0.75% of my account on this trade and I plan to move my stop to breakeven once my first target gets hit. I’ll keep the rest of my trade open and adjust my stop every 50 pips if NZD/USD breaks below the channel.

What do y’all think of my trade idea? Do you think this short setup will score me enough profits to go on a shopping spree on Black Friday? Holler at me!

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Happy Thanksgiving, everyone!

Happy time

  • danbld

    Morning, Happy. I suggest u to wait a little bit for a bounce, will it come i think. Also, if we look at the sp500 and ftss 100 charts we ll see some gaps which must be fill. Most important the support (now resistence) must be “check”. This is my opinion, but u can try. U remenber what i tell u about the gbp usd trade? Nice!

  • Greg

    Happy,

    I thought you were brave to leave a trade on after you secured the first 50 pips, with the up coming elections happening. You did better last week than me. Well done. Looking forward to your next set up. :)

  • danbld

    if u permit me to give u an advise, i think is better to stay on sidelines this days (thin volumes and maybe european banks “makes the move”) All european banks rally at the moment.

    • happypip

      Thanks a lot for the advice, danbld!

      Good call on GBP/USD! Did you take profits already?

      Btw, since my order already got triggered and is actually a few pips ahead, I’m planning on moving my stop loss to break even to limit my risk exposure. Are you looking at retracement levels for this pair? :)

      • danbld

        Yes, Happy, i took the profit on gbp usd and i wait a bounce to re enter. you know my strategy, usd my friend!!!!! i prefer to wait right moments. NO EUR!!!! too MANY problems

        • happypip

          Haha, I totally agree on the euro having way too many problems. Hopefully we see more interesting price action tomorrow when other traders are back from the holidays :)

          • danbld

            Well done. I m happy for Happy!

  • Mario

    Hello Happy,

    I’m with you on this one. I actually entered yesterday as I saw a support breakout in the weekly chart. I took my position using the daily chart at 0.74211. I’m hoping that this works out. :)

    • happypip

      Yay, glad to have a fellow comdoll trader on board! I hope this one works out too. I think NZD is retracing a bit around your entry area, but so far the falling channel on my chart is still holding. Fingers crossed! :)