Another Trade Update: 2011-09-08 07:40
After closing my NZD/USD day trade yesterday, I’m now looking to trade my swing trade setup. Yesterday I pointed out a possible tweezer bottom on the pair’s daily chart with gold‘s safe-haven status as the main fundamental support.
But now that Australia’s employment reports surprisingly showed weak numbers, I’m thinking if I should switch to the bear camp… or see it as an opportunity to buy.
Right now it looks like risk is still on in the markets, with AUD/USD bouncing up from its post-employment report lows. The question is, will the pair continue on its way up, or will I have a chance to enter at a possible support at 1.0550?
I’m thinking Stochastic is still in the overbought region, and the bears might be attracted to the 50% Fib at the minor psychological level. But if the pair is done retracing its move, then I can always enter at market, aim for 1.0750, and then put my stop below the support that I pointed out.
What do you think? Should I trade this setup? You can reach me at one of the links below if you have any tips, advice, or questions for me.
Trade Update: 2011-09-08 21:10
Aww, what a bummer! My short NZD/USD day trade got stopped out as risk appetite improved yesterday. Price busted through the Fibs I drew and ended up hitting my adjusted stop loss around .8310.
In retrospect, I probably should’ve been much more patient with my entry. You see, I was already watching the price tick down from the 38.2% Fib, which was why I decided to enter at market. I should’ve waited to short at the .8300 handle instead, which would enable me to set my stop a bit higher and give the trade more breathing room.
Instead I ended up with a 0.5% dent on my account and another blow to my confidence.
Oh well, I still have my long AUD/USD swing trade idea. Do you guys think I should go for it? As I mentioned in my trade idea, I plan to wait for the Australian jobs data to be released first and I’ll decide to pull the trigger if the actual figure is better than expected. Let me know what you think and I’ll keep you posted!
Trade Ideas: 2011-09-07 5:36
Day Trade: Short NZD/USD
I know, I know. According to the results of my “Which Trading Style is Best for You?” personality quiz, I should focus more on swing trades. But my, oh my, this NZD/USD day trade setup was just too yummy to ignore!
The pair is on a strong downtrend since last week as risk aversion continued to loom over the markets. With absolutely no reports on New Zealand‘s schedule for the rest of the week, I’m thinking this pair would simply continue its trend. I put up the Fibonacci tool on the latest drop and noticed that the 38.2% Fib lines up with a broken support level. To top it all off, that’s also the top of today’s average daily range!
But that’s not the best part yet. Making this trade even sweeter is the bearish divergence on the pair’s recent highs. Stochastic was already about to cross so I just went for it and sold at market. I risked 0.5% of my account on this trade and set my stop above the .8300 major psychological level. Since this is just a day trade, I’ll be going for a 1:1 reward-to-risk ratio and aim for the pair’s recent lows just above .8200.
Swing Trade: Long AUD/USD
And now for my swing trade idea! With the SNB basically preventing traders from gobbling up the franc and the state of the Japanese and the U.S. economies putting a cap at the dollar and the yen’s gains, it seems that gold is the only true safe haven out there.
You know what that means – possible gains for the gold-related Aussie! Of course, it also helps that Australia’s GDP released a couple of hours ago revealed a 1.2% increase in the second quarter when my trader friends only saw a 1.0% growth.
With those fundamental factors in mind, I’m finding my AUD/USD setup more and more irresistible. On the pair’s daily chart the pair seems to be supported by a rising trendline, and it looks like the pair just bounced from the 61.8% Fib at 1.0500. The cherry on top of this setup is the possible tweezer bottoms. The last time it showed a similar setup back in August 25 the pair rose above the 1.0700 handle!
I still have to be careful on this one though. 1.0600 could still become a support-turned-resistance level for the pair, and risk aversion could still hit the markets.
So, what do you think of my trade ideas? Are you in on any of these with me? I still don’t know where to enter my AUD/USD setup so a few tips will be much appreciated! Here’s where you can reach me: