The RBNZ decided to join the other major central banks in their dovish rhetoric, igniting traders to quickly sell of the Kiwi this week and trigger my trade to close. Here’s a quick review.
Trade Closed: AUD/NZD Resistance Retest?
After I closed down 75% of my short AUD/NZD position on Tuesday, the Reserve Bank of New Zealand adopted a gloomy global economic outlook this week and signaled the likely next move would be a rate cut. The New Zealand dollar immediately sold off on the news, with AUD/NZD popping higher well over 100 pips within minutes. Needles to say, my adjusted stop at 1.0380 was triggered, closing out my remaining position.
Total: +55 pips average / +0.35% gain on 0.50% risk
Overall, not a bad trade as I was got the directional bias right, and I think I managed the position well with my adjustments to lock in profits and add back when it made sense. Probably the only thing I would have done differently was to go bigger with my risk, since this was a trade I planned on holding on to for a while. And since volatility has been creeping lower this year after it elevated at the end of 2018, it makes sense to go a little bigger if I continue to hold trades for a month or longer.
What do you think? Is there anything else I could have done better on this trade? Let me know in the comments section below!
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