Looks like I’ve finally caught a bit of luck with my AUD/CAD short idea, and after a nice move lower, I think it’s time to lock in some profits.
AUD/CAD Short on Selling Momentum
Since my original idea post, I did eventually get a little bounce in AUD/CAD up to my short entry orders right at parity where I was triggered. And after a period of hanging out above my entry level, the bears came out strong on a combination of an unexpectedly less-than-hawkish Reserve Bank of Australia meeting and speculation that the Bank of Canada may hike interest rates at their monetary policy meeting next week, thanks to recent commentary from BOC members.
Of course, I have no idea what we’ll get from the next BOC meeting, but I do know that which ever way they choose to go, traders can take the Loonie any which way, a lot of times counter intuitive to what the BOC does. With that in mind and with AUD/CAD already hitting my initial target at .9800 today, I’ve decided the best adjustment from here is to lock in some profit and reduce my risk. Here’s what I did:
Close half of my position manually at .9833 and rolled down the stop on my remaining position to breakeven (1.0000). I will also adjust my re-assessment target to .9600, where I’ll review once again and possibly look to add to the position if it makes sense.
With this adjustment, I lock in a +0.23% profit and it gives me breathing room to weather the potential volatility that we may see, not only from the BOC meeting next week, but also the upcoming Canadian jobs data that could be a big influence on the rate hike decision.
So it’s wait-and-see time for now, and once I do get the jobs data and monetary policy decision, I’ll do a re-assessment to see whether or not staying in the trade makes sense if I’m still in it.
Stay tuned 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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