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Caught a bit of good luck on my EUR/NZD short idea, and with the pair going my way by a couple of hundred pips, I’m adjusting my plan to take advantage of the momentum!

Trade Adjustment: Fib Short on EUR/NZD


Last week, news that the ECB is possibly looking at stimulus moves to boost the European economy once again, versus positive global risk sentiment lifting the Kiwi had EUR/NZD moving lower with strong momentum. Since entering at market (1.6953) with 0.33% risk last week, the pair has dropped to its current week lows around 1.6735.

With the market solidly in my favor, my belief that European economic data will continue to signal weakness, and the unlikelihood my upper orders will get triggered, I’m going to add to this position to maximize my potential gain, but roll down my stop to keep my risk very, very low. Here’s what I’m doing:

  • Rolled stop on initial position to just below  breakeven to 1.6950. No risk.
  • Sold new position at market (1.6739) with 1.6950 stop, and position size set to 0.33% risk.

So my new average price is 1.6875 and my risk (if stopped out at 1.6950) remains the same as my initial nibbler position risk of 0.33% because I rolled down my stop.

My max gain on my original nibbler position was +0.35% at target on 0.33% risk (or just above 1:1 return-on-risk). With this adjustment, my risk is still 0.33%, but my max gain is now 0.92% (because of the bigger position size) and 2.8:1 potential return-on-risk.

I do want to get into the full 1% risk position size that I originally planned, but for now, I’m going sit with this position and see how European data plays out, as well as how New Zealand’s quarterly CPI number will do (set to release Jan. 22) before getting any bigger.

Stay tuned for potential adjustments if the story changes, 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.

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.