EUR/NZD continues to move in my favor but with another potentially negative Kiwi event coming up, it’s time to adjust to lock in profits & create a “risk-free” trade.
Trade Adjustment: Fib Short on EUR/NZD
At my last trade adjustment on EUR/NZD three weeks ago, I added a smaller position at 1.6739 and rolled down my total stop to 1.6950 to create a bigger position with an average price at 1.6800, and a bigger profit potential while keeping my max risk at 0.33%.
Since then, the market has continued to roll down further, most likely on weakening European data putting pressure on the euro and rising global risk-on sentiment in the past few weeks helping lift up the Kiwi. So, this trade has been performing pretty well for me (up roughly 0.46% on 0.33% risk or a 1.39:1 total return-on-risk) and the odds are still good for the pair to stay in a longer-term downtrend.
But there’s a potential wrench coming at me from New Zealand this week in the form of the quarterly employment report, which is expected to report weaker numbers than the Q3 2018 report. This could hurt the Kiwi leading up to or after the event, which why it’s probably a good idea to lock in some profits today and create a plan for if it either goes against me or my way after the event.
- Bought back half of total position at market (1.6563) to lock in at least a 0.15% profit
- Rolled stop down again to average price (1.6875) for 0.07% remaining max risk
If I’m still in the trade after the NZ jobs data and the report isn’t wildly bearish for Kiwi, I’ll look to add back to the position. I’ve also taken off my orders at my profit target in case something gets EUR/NZD into a strong downward momentum move. So in the end I’ve locked in a profit, created an even lower risk trade and left myself open to increasing my potential reward. Not too shabby.
Stay tuned for potential adjustments if the story changes for EUR/NZD after the jobs report, 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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