Welcome to my Forex trading and investing blog. This is where I share my opinion on the direction Forex pairs may go, as well as talk through the individual trades that I make. Today, I took a short trade in the pair Aussie-Dollar. Read on to see how this one worked out.
AUD/USD Short
Expected Entry – 0.6589 Stop Level – 0.6605 Target – 0.655 R:R – 2.4
I’m taking this for similar reasons as NZD/USD, but this pattern looks a bit better; and the numbers are better. There’s a clean bear-rally on the 15 minute chart, and a clear target on the 4 hour chart.
Entry – 0.65888
Similar to NZD/USD, a lot of weakness came in to this pair very quickly — it dropped 20 pips in a couple of minutes; triggering my entry into the trade and pulling me slightly into profit. I had a larger risk in this trade than NZD/USD, though, so I wasn’t thinking about moving my stop at all. I also liked this entry and stop level better, so I was comfortable letting it ride.
Exit – 0.66051
That, maybe 6 pips of profit, was the furthest this pushed, though. Price rallied (like Kiwi-Dollar), but unlike that pair, never really pushed back into profit. It pushed back down, but not below my entry.
Eventually, shortly after my last trade exited, price rallied enough to reach my stop loss here for a full loss.
I’m not even really sure what to say here. I mentioned it in my last trade: If I can’t get significant wins when price triggers not long after setting my entry order and quickly pushes several pips in profit, then where am I going to get the significant wins?
That’s trading, though. I’m not predicting where the market’s going to go, I’m playing probabilities. I’m betting that based on what I see price could make a significant push; not that it will. I only expect to make a full 2+R on about 15 – 20% of my trades, so I just need to take losses like these in stride.
To be fair, too: I know AUD and NZD are highly correlated and move very similarly, but for some reason I held on to one and not the other. They’re obviously not 1:1 and anything, really, can happen; but that’s not how I expect to make money in the long-term. I would deem that an entirely luck based win, and not one that follows my system. So I probably should have been as aggressive with this pair as I was with the other one.
On the bright side, I liked the fact that I came across a couple things that I liked base on the RSW chart that I have. I liked the fact that the trades did trigger so quickly — I think I’ll be the most successful when that happens (rather than waiting all day for something to happen). And I liked the fact that I was able to sit here and actively manage the trades instead of setting trailing stop orders and hoping.
Conclusion
All in all, it was a good pattern, a good R:R, and I pulled the trigger without much hesitation. I can’t ask for a ton more than that I don’t think. I just need to keep finding opportunities; keep trying to make the best decisions possible; and continue to remind myself that it’s a numbers game. Just keep swimming.
Thanks for reading! Let me know in the comments below your thoughts on todays trade. Or, if you were able to capitalize on something else, use the comments to let me know about that as well. Don’t forget to check back frequently to see more trades and analysis!