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Trade Closed: 2011-01-20 03:32

PoD Chart

I was up by almost 150 pips on this trade, but some of my profits were erased when New Zealand released its inflation report. Don’t get me wrong, the actual figure didn’t disappoint, but the components of the report showed that the 2.3% quarterly CPI increase was mostly a result of the recent increase in the goods and services tax. I guess that means price levels didn’t rise so much during the last quarter of the year and Kiwi bulls were disappointed to find out that inflation was as soft as cream cheese during the period.

While I’m still happy that I was able to lock in some of my profits in my first position, I felt slightly disappointed to see a huge chunk of winnings get erased. To think I was already picturing myself buying some shiny new kitchen tools with some of my profits! *sniff*

Maybe I would’ve ended with more gains if I used a trailing stop or moved my stop to my first profit target just before the inflation report was released.

Another nice strategy to maximize my winnings was to add to my position during the pullbacks. Looking at the price action in retrospect, I noticed that NZD/USD retraced to my first profit target at .7700 before zooming up again.

Instead of simply closing half my position in that area, I could’ve added maybe half my position size and moved my stop to breakeven. Then, when the pair reached the next minor psychological level (.7750), I could’ve adjusted my stop to my first PT (.7700). In effect, I would’ve locked in 60 pips in gains for my first position, with a risk-free second position. That way, I would’ve locked in a full 1% on my first position instead of just 0.5%.

Anyway, here’s how it all panned out:
Profit/Loss: +60 pips / +0.5%

I’m sure y’all have plenty of other ideas on how I could’ve played this trade better. As a trader, I’m still continuing to strive for improvement and I definitely need your help for that. I’d like to hear your thoughts, so feel free to vote on the poll below, drop a comment or two, or hit me up on!

Trade Update: 2011-01-17 03:32

NZDUSD Support Bounce

Yipee! I’m off to a good start this year since I caught a good entry on NZD/USD and I locked in some pips at my first profit target. As you can see from the chart I posted above, the pair did bounce from the .7640 area as I anticipated and moved all the way up to my first target at the psychological .7700 handle.

Half of my position is still open and I’m hoping it’ll climb all the way up to my second profit target at the .7800 level. Of course I already moved my stop to entry in order to protect my recent winnings. I think it’s time for a celebratory slice of banoffee pie! Nom nom nom!

Trade Idea: 2011-01-13 23:02

NZDUSD Fibonacci support

It’s time for another trading year, friends! Are you hungry for some pips? I know I am! This week I set my eyes on buying NZD/USD like it’s a KitchenAid mixer on sale.

New Zealand‘s economic schedule is empty for today, but the upcoming reports from the U.S. could shake things up a bit. Today we’ll see inflation and retail sales data at 1:30 pm GMT, followed by the University of Michigan consumer sentiment report around 3:00 pm GMT.

U.S. CPI is expected to be up by 0.4% after seeing a 0.1% uptick in November. The core version of the report is projected to rise by another 0.1% in December. Meanwhile, retail sales are also estimated to rise by 0.8% in December, but I’ve got a hunch that we could see a larger increase. After all, doesn’t spending usually pick up during the holidays?

An upside surprise could boost risk appetite, which would be good for the comdolls. Until these reports are released though, the Kiwi could be weighed down by the recently released credit card spending, commodity, and house prices data which were weaker than markets expected. This could take NZD/USD back down to my entry point just before the U.S. session kicks off.

On the technical side, I’m looking at the chart’s 50% Fibonacci level for a possible retracement. I’ve been too busy jogging off those eggnog calories from the holidays to catch that big wave up, so now I’m hoping that the .7650 handle will become a resistance-turned-support level. After all, Stochastic is in the overbought region, and the rising trendline is still holding, right?

So here’s what I’m cooking:

Long NZD/USD at .7640, stop loss at .7580, pt1 at .7700, pt2 at .7800.

I’ll be risking 1% of my account on this one so wish me luck for my first trade of the year!

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