AUD/USD Update

Took two-thirds out yesterday at 1.0063 as it tested previous low.

Now keeping remaining third in to T/P at 1.0025 - currently at 1.0037 as I type.

May look at re-entry on this one later if it retests underside of trendline then down through parity.

Some Potential Set-ups for the Week

Still hanging in on the AUD/USD. Tried a scalp long on the USD/JPY this morning off support but got stopped - should learn to leave Mondaya alone during the dull Asia session.

Some things I am lookinga tthis week:

EURUSD
- Daily Wave A short
- 4H at top of upward channel

USDJPY
- stopped out of 4H candle pattern long

AUDNZD
- Wave A on Daily short
- market is stretched
- interest rates may drop this week on NZD (this puts doubt into tech read)
- fill at 3750 with 35 point stop?
- missed entry this morning
- wait for pull back to fib level

EURJPY
- pinbar on Daily (short)
- 4H in wave 3 long
- Trade wave 4 short but 1H may have one more move up
- resistance at 116

EURCHF

- long 1H wave 5
- 1 hour candle pattern at 1pm (WAST)?

EURGBP
- ABC correction and 76% fib at 8760 short
- Wave A 4H short off 8625 (127%)

Knowing When to Take Profit?

I am still in the AUD/USD short trade below from Monday 28th Feb.




I fancied the price action toward parity after the ABC correction to previous resistance at the 1.0190 levels. My initial take profit target was above parity at 1.0008. I then decided to lift my target to 1.0078 only to painfully watch as price stalled at the 50% fib and 4hr moving averages.

I also tried to take a smaller scalp position of the 50% and 1H moving average but that took me out as the news hit.

Looking to next week - I have taken it through the payroll number on Friday. in advance of this my take profit is now 1.0025 which is around the trend line support. I will monitor this to maybe take it out earlier at 1.0050 - 200 EMA support.

In hindsight - like the EUR before - maybe should have been content with a couple of 2:1 risk reward trades?

EUR/USD - Getting taken out at the High now that is Annoying

Last night saw the EUR trade get taken out at my stop to the exact point - i had a buy stop on the Bid at 1.3855. My broker printed 1.38551 - isn't that frustrating. Now that may be understating my actual feelings slightly. This is a Scotsman who believes that conversation would be rather dull without some colourful adjectives. The picture was rather more like this - walk calmly into the back room and scream f#$^ at the top of my lungs.

All that said the fact is that I was almost 100 points up (= $1500) in the morning only to watch the price rise steadily over the course of the day to my stop just after the USD news.

Given that I could argue that I should have got out around 1.3720 in the morning when the price faltered (didn't break previous low at 37) and showed signs of a trend continuation. Hidden divergence with price and the stochastic.

It is easy to talk yourself out of a losing trade in hindsight - the fact is that the game plan was to stick with it to the 1.3760 level (62% Fibonacci). The market still looks very long and if it rolls over there is a lot of money to make - there will be a heap of stops to take out on the way down.

So what to do? I am short the AUD/USD at present which is looking very bullish at present - once again if this rolls over it could make the week. And if it fails? Next!

I still like the EUR short at the 62% retracement at 1.3825-30 .

A heap of big news on the AUD today - I don't think I will be left wondering on my short position!

EURUSD - Knowing When to Get Back in

Entered into the EURUSD off a corrective ABC set-up. Had a tight stop and half of the position got taken out at 1.3838 - the other half manged to hang on.

However as the price stalled at the previous high I got back in at around 1.3825.

Let's see how it pans out this week. First target at 1.3605.

Three Jabs on the Chin

Last week was a test of my resolve as I got knocked back three times with the AUD, EUR and GBP in quick succesion. I held fast in the USD/JPY short and picked up a 2:1 risk reward trade after 7 days. It still means I am down one unit of risk for the week - $500 in my case.

AUD/USD - Fib trade short off 76% bulldozed the stop.

EUR/USD - Fib trade short off 76% went 40 points in the money then took out the stops for new highs

GBPUSD - ABC Corrective move that didn't work

NZDUSD - He Who Hesitates

Was monitoring the Kiwi for a wave 5 down. It was a nice set up with technical resistance levels at the 200 EMA and the 50% and also close to the bottom of Wave 1.

i talked myself out of it by looking at the 1 hour chart where I figured there may be one more move up. Given no significant price indicator divergence.

However when I got up this morning I was thinking I should get at least something set at 7635 level as the 1 hour chart had a candle pattern (doji). News on the Kiwi was pending and since I was already in the USDJPY trade then I decide not to take it.

Certainly was the one that got away and would have made the money for the month. Hit the 127% extension within a few hours.

I need to show the bad and the ugly also as I had a few stops last week that I need to post

USDJPY Grinding Down

I got into the USDJPY last Wednesday. A combination of technical aspects had me enter short. My entry was 83.68 with a stop at 84.09 that held (just) and a profit target down at 82.35 (62% fib retracement) .

I liked it as a wave 4 with price indicator divergence and a protracted ABC corrective move (highlighted in blue) up to the 83.85 area at the 100% extension. It was also pausing around the 76% fib retracement level.

Notionally take profit would be around the 200 EMA at 82.65. However, I am going to try and fill my boots on this one and punt for a 62% retracement down to 82.35 area.

Update:- got out at 82.80 was showing good support at 200EMA

Potential Set-ups for Coming Week 14th Feb 2011

USDJPY

i am looking to go short for a wave 4 - i will monitor price action Monday and potentialy get a retracement to 83.50 for an entry prior to London open.

GBPUSD
Potential long set-up around 59.30 to 50 area fib support and ABC correction - assuming it as a 3-3-5 sub-wave correction. Wait for new lows and divergence on price/momentum for an entry.

Update :- Never made a new low so I didn't get in this sequnce - ran up nicely though

Solid Week with the Aussie

Account up around 1% this week after a couple of early stops.

My first punt this week was on the EURGBP off the trend line resistance. Looking at it now was approaching the 76% fib from the January move North and the 1 hour chart was showing price momentum divergence - pretty poor selection for first trade of the week. Stopped out pretty rapidly.

My second set-up was on the EUR/JPY - as a ABC corrective move short. This one didn't leave we waiting either - so zero from 2 early in the week.

Then the AUDUSD set-up again fro a corrective Wave sequence down on the 1 hour. I took it off the top last Friday and got out with a modest profit prior to the US payrolls. I re-entered this week off the retracement to the 76% fib levels and rode it all the way down to parity. I took some profit on the way down to reduce my risk.

A New Year - A New Focus, Trades of the Week

It was a frustrating week mainly because there were a few high probability set-ups. However, for several reasons i messed them up.

The USDCAD formed a wedge of price consolidation. I prefer to take these set-ups as they return to the previous support level. In this case prior to a news announcement the price retraced to 9970. I got an entry at 9980 with around a 30 pip stop.

I got too greedy here where I set take profit 1.0190 at previous Daily swing high. A 2:1 risk reward was more appropriate for this news induced moved. I was stopped out the next day

The next trade was on the 'Cable' which was and ABC corrective move - the idea was to go short as the price drifted up to previous highs from the impulsive move. No mistakes here it just blasted through - they don't always work that is why the risk reward considerations are paramount.

The two screen shots above on the AUD and the USD-Yen illustrate my positioning ahead of the non-farm payrolls. The USD Yen was a ABC correction into support at 81.50. I got set early in the week and the price popped up a bit and drifted until the announcement. I always had the intention to hold this position through the news - hopefully with sufficient breathing space on my stop for the volatility.

Prior to the announcement the AUD/USD was showing price and indicator divergence and price on the 1 hour chart was indicating the end of a impulsive wave 5. I set myself short at 1.0180 a couple of hours prior to the news. My intention here was to take a quick 1:1 profit and get out before the news.

Here is how it frustratingly panned out:-

• The AUD popped south and I was about 15 pips in the money
• As per my plan I closed the AUD prior to news with a modest 15 pip profit
• The USD spiked South at the payroll announcement adn took my stop out within 4 pips of the low - aaaaaargh
• It immediately retraced the move but it was all to late to chase.
• As this was happening the AUD (which I expected to inversely follow the USD) - spiked higher but my stop would have been safe at 1.021 below the trend line resistance
• As expected the AUD (inversely) followed the post news move South
  

I was still spitting chips on Saturday evening as I counted my losses for the week. The ironic thing as I watched my (virtual) mentor Don Millers next episode of Trading after Dark (TAD) http://donmillereducation.com/journal/ on Saturday afternoon was his reminder to me about placing stops just under previous highs/lows. I was hit wit the sucker punch this week.

It is little consolation that I was very close to a decent profit for the week - all that matters is grinding out the P from the L but still looking forward to next week.

The aim is to get wholesale set-ups - which seems to be buying currency on dips at the moment.