Triangle Break on AUDUSD – Trade Closed

comdollsff

Trade Closed: 2009-12:29 10:11

Good Morning! I hope everyone had a great holiday weekend! It didn’t look too great for the Greenback as it lost some ground to the Aussie on a return of focus to global recovery. AUDUSD rallied higher since the beginning of this shortened trading week and closed out my remaining position at my adjusted stop (.8910).

1st half: +105 pips
2nd half: +95 pips
Total: +0.83% gain

In retrospect, I probably should have closed the trade down a bit sooner. There was a technical reversal signal shortly after I adjusted my stop, marked by the doji and strong bullish candles (highlighted in the red box on the chart above). Also, a bit of bullish divergence (lower price “lows” and higher stochastic “lows”), which actually made it a strong buy signal. I guess I was a bit too “married” to the trade to notice the upcoming reversal. Lesson learned and hopefully I’ll catch it next time.

So, that’s it for 2009! It was a bumpy ride as conditions changed and my old methods of trading didn’t immediately mesh with the new trading environment. It took a while to adjust, but it looks like I ended the year with a few wins. Thanks for checking out my blog everyone and I’ll see you in 2010!! Yay!

Trade Adjustments: 2009-12-21 15:50

Woooweeee! It’s been a great ride for my short position in AUDUSD since the triangle break as the pair has dropped down two handles since last week. My first profit target was hit, where I took some profit and adjusted my stop, but it’s time to readjust as the pair now retests last week’s low. I don’t know if this area will bring a bounce in AUDUSD, but it’s better to be safe than sorry by locking further profits.

Adjusting stop on remaining position to just above Friday’s high (around .8910). Will continue to .8600 and trail stops from here.

This adjustment allows me to lock in further profits in case momentum shifts back to the upside. Big moves aren’t expected during the holidays, but we do have quite a bit of data to go through before the shortened week ends. No major Aussie data on the Forex Calendar, but US GDP data is in the line up for Tuesday and it may be the biggest market mover of the week. We also have durable goods, housing, and inflation data from the US to provide a spark of volatility here and there. Trade safe and always protect your capital!

That’s it for today. Stay tuned for more adjustments and updates, and have a “Fantabulous” holiday season! :)

Trade Idea: 2009-12-15 21:08

comdollsff

Hello forex friends! I’ve been waiting, waiting, waiting, and now finally–a triangle break! Will AUDUSD continue to drop?

We just saw the latest read on Australia’s GDP and it wasn’t a positive for the Aussie as it came in below expectations at 0.2% vs. a forecast of 0.4% growth. The pair dropped below the rising trendline on the chart and below last week’s low around .9015. This price action will definitely grab trader’s attention, especially since the Greenback has been strong across the board lately, so the momentum may continue.

Fundamentally, we saw a surprise in US PPI today as the headline number came in at 1.8% vs. the forecast of 0.8%. This brought on questions of inflation creeping higher and the possibility of rate hikes in the US. Will we see the same from CPI tomorrow? It’s possible, but the real catalyst for price action is the FOMC rate decision in the afternoon US trading session. My fellow forex fanatic, Forexgump, wrote an article on the event, and he thinks the FOMC may get more aggressive! To read his thoughts, please visit his forex blog.

I agree with Forexgump’s views, and I think the latest economic numbers look good enough for investors to start putting bets on future rate hikes. This sentiment will last as long as the data continues to look good and may continue to push the Greenback higher.

So, based on the most recent economic data and the technical break I have shorted AUDUSD. My stop will be the daily average true range (120 pips) and above the middle of the consolidation range, and I will target the next area of potential support around the psychologically round number (.8900). My ultimate target will be the next potential support area where we saw AUDUSD consolidate last (.8600 – .8800) and beyond. Here’s what I am going to do:

Short AUDUSD at market (.9005), stop at .9125, pt1 at .8900, pt2 at .8600

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

This trade looks great fundamentally, technically, and the risk to reward is very favorable. Let’s see where the market takes me. Stay tuned! :)

17 comments

  1. clipmax

    Hallo Happypip
    there is something not clear in this post. When did AUD/USD go to .9005? In my chart yesterday lower was .9035. Thank you very much for your reply

    Reply
  2. clipmax

    Hallo Happypip
    there is something not clear in this post. When did AUD/USD go to .9005? In my chart yesterday lower was .9035. Thank you very much for your reply

    Reply
  3. Jerome

    Happy Pip question maybe a dumb question but how did you determine Daily ATR was 120pips is base on the candles it self or is there an indicator that show you.

    Reply
  4. Jerome

    Happy Pip question maybe a dumb question but how did you determine Daily ATR was 120pips is base on the candles it self or is there an indicator that show you.

    Reply
  5. Happy Piphappypip

    @Clipmax, as I was writing out my post AUDUSD hit .9005. @Jerome, ATR is a common chart indicator that can be found on most charting platforms. I apply it to the daily chart with a setting of 20. This means it looks at the ranges over the past 20 trading days and averages them out. I hope this helps! Thanks for the comments everyone!

    Reply
  6. Happy Piphappypip

    @Clipmax, as I was writing out my post AUDUSD hit .9005. @Jerome, ATR is a common chart indicator that can be found on most charting platforms. I apply it to the daily chart with a setting of 20. This means it looks at the ranges over the past 20 trading days and averages them out. I hope this helps! Thanks for the comments everyone!

    Reply
  7. Jerome

    Something as simple as the ATR understanding has just increase me. Thanks

    By the way I been riding this pair with you it is a nice ride I wish wouldnt have to end.

    Reply
  8. Jerome

    Something as simple as the ATR understanding has just increase me. Thanks

    By the way I been riding this pair with you it is a nice ride I wish wouldnt have to end.

    Reply
  9. foricks

    Another great trade. I closed out the second half last week at .8764 so that I could enjoy the holidays and watch the sideways motion. Thank you for all of the advice this year. I have learned a lot about position trades and patience from you this year. See you in 2010.

    Reply
  10. foricks

    Another great trade. I closed out the second half last week at .8764 so that I could enjoy the holidays and watch the sideways motion. Thank you for all of the advice this year. I have learned a lot about position trades and patience from you this year. See you in 2010.

    Reply
  11. frog

    i like your methods. i recon watching you will give me more confidence in placing a trade. i’m a bit nervious to risk at the moment. this will change when i get more confidence. thanks, frogs

    Reply

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