AUD/CHF rallied strongly this week to eventually hit my adjusted stop & close out my remaining position. Here’s a quick review!
Short-term Downtrend in AUD/CHF?
Last week, I adjusted my AUD/CHF short trade to lock in profits by closing down roughly 70% of the position and rolling the stop down to 0.6565. This adjustment locked in a 82% return-on-risk, or 0.41% on my original 0.50% risk, while increasing my max potential return-on-risk from 112% to 120%.
It wasn’t too long after that adjustment that AUD/CHF fell further during the Friday session, likely on more Coronavirus news accelerating fears that it will hit global growth. The pair actually got to my adjusted target of 0.6455, but I decided not to close it out as I though the momentum was strong and would continue on in the following week.
Unfortunately for this trade, global risk sentiment shifted big time, likely due to China’s stimulative efforts to support the economy as the odds looked high China will take a big hit from the virus outbreak. It’s also likely that traders were less fearful as news reports came out raising speculation that a vaccine for the Coronavirus may be on its way. AUD/CHF rallied with the rest of risk assets this week, eventually triggering my adjusted stop at 0.6565 to close out my remaining position.
Total: +66 pips avg. / +0.41% gain on 0.50% max risk
Overall not a bad trade, but I definitely could have done a few things differently. Mainly, I probably should have closed the trade down after the China stimulus news, and especially after the reaction to the potential for a vaccine. But at the time, I thought this bounce would be another selling potential, but there didn’t seem to be any kind of resistance on the way up.
The only other thing I think I could have done differently was to roll down my stop at least as the pair reached my adjusted target at 0.6455. But with volatility picking up, I decided to not roll it down because as I mentioned above, it could have been another selling opportunity. Of course in hindsight, this makes sense, but it’s not always that easy to decide in real time.
That’s it on AUD/CHF for now, but I will keep an eye on the pair for more trading opportunities since it closely trade with Chinese events and broad risk sentiment. Stay tuned for updates and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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