Eep, it looks like NZD/USD is way off my entry area now and it’s time to move on to another setup instead.
As you can see from the pair’s 4-hour chart, the pair simply moved sideways after faking to the downside a few days back.
I guess you can say that risk has been on and off for the past few days as traders dumped the safe-haven U.S. dollar on news of the debt ceiling extension but bought it back up later on. As Forex Gump always says, anything can happen!
I’m pretty happy though that I set my buy stop and sell stop orders far from the pair’s consolidation area because this kept me from getting caught in a fakeout. However, I do wish I was able to grab some pips off this trade by playing the pair’s range when it started cruising sideways.
Any other ideas on how I could’ve made pips this week? I’m still feeling a bit bummed by my USD/CAD loss so I could use a few helpful tips right now!
Phew! Talk about dodging a fakeout! Thank goodness I set my straddle orders a bit farther away from the current price. Do you think I should keep my orders in though?
I set my short order at .8330 and my long order at .8460, with a 100-pip stop for each entry. It appears that the pair faked out to the downside though after New Zealand printed weaker than expected quarterly inflation data earlier today.
Right after the initial selloff, the pair bounced right back up! Thank goodness I was wearing my lucky socks and I didn’t get whipsawed!
A few hours later, the Chinese GDP released came in stronger than expected. Although this didn’t seem to be enough to keep NZD/USD from dropping, I’m thinking that this could boost risk appetite in the markets for the long haul. This is why I decided to cancel my short order and just keep my long order instead.
Do you think that’s a good idea though? Or should I opt for a retracement play instead? I’m a bit worried about keeping my long order in over the weekend so I’m feeling torn. A little help, please!
With my AUD/USD trade already risk-free, I’m ready to take on another trade!
If we take a look at New Zealand’s calendar we’ll see that the recent reports aren’t really giving us direction. The country’s house prices slipped sharply in December while the NZIER business confidence came in more than twice its previous figure.
Even the risk sentiment this week is no help as it has shifted from risk-on to risk-off about as often as I change my night-out shoes.
This is why I’m taking a straddle trade on NZD/USD instead of committing to a direction. Right now the pair is showing a nice symmetrical triangle on the 1-hr chart and a possible bullish pennant on the 4-hour chart.
I’m thinking of going long above yesterday’s high if New Zealand’s CPI or China’s GDP prints in favor of the comdolls. But if either or both reports miss expectations and cause risk aversion, then I’ll sell just below the bottom weekly ATR level that we had marked in our Comdoll Trading Kit this week.
I’m planning to buy if it breaks above the .8450 mark or short if it drops below .8350. I’ll be setting my orders during the Asian session though to avoid fakeouts in today’s NY session.
What do you think of my setup? Are my entry levels too close to the current price action? Or should I just commit to a direction now and just place tight stop losses?
Feel free to tell me what you think!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.