A little bit of a late start this morning. It’s now 8:20 and I’m just getting started, so I’m diving in. There aren’t any news events this morning, so I’m going to look at all of the currencies this morning (not that I wouldn’t, necessarily, if there was one..).
IDK what to do. I’m just going to keep swimming, but at first glance in the baskets, USD was strong yesterday and AUD was weak. I shorted AUD/USD twice and wasn’t able to capitalize on anything. Maybe I should just look at EUR/USD and try to capitalize on just price action and not worry about RSW, which means I might be more open to moves in either direction since I won’t be going in with a bias. Also, I won’t have to make tough decisions about making a trade with a 5 pip stop when there’s a 5 pip spread.
So, this morning, I’m going to figure out a way to find the 3 – 4 pairs with the lowest spreads, and just watch them and try to capitalize on the movement/price action and not worry about which direction I think each currency “should” go.
USD/CAD – Long
USD/CAD rocketed up at the open this morning, and I was (and, technically am a little) worried that it was extended. I thought it needed to push a bit further to really be extended, and I was waiting for a bit of a stall. Price pulled back about 75% of the gains, then started pushing back up. I had chosen a target on the hourly chart already, and on the push back up, I selected an entry that was the close of one of the candles on the initial up-move and a stop at the key level it broke first thing this morning. When I ran the numbers, my R:R was 3, so I set an entry order that was triggered a minute or so later.
Price made it to roughly .7R, at which point, I moved my stop to break even; for a few reasons:
1) Trading on this small of a time-frame, I don’t think it makes sense to wait for a full 1R, especially if I have to sit through a long bout of not much movement, just to hope it gets to 1R later. That’s fine when trading hourly charts, but not here, now. I think I’m going to adjust my rules to move my stop to break even between .6R and .9R, something like that.
2) chances are, since I am trading lower time-frames now, that price won’t hover for several minutes before pushing in my intended direction. Once a move reverses in the opposite direction that I traded, it more often than not makes it back to my stop-loss, so locking in profits when I can makes sense to me (It’s something I’ve wanted to do, anyway).
And 3) maybe a little fear; not wanting to take a full loss on a trade that was in my favor.
Price hovered around a 5 pip gain for a while before making a fairly large drop, stopping me out at break even — pushing further down through my initial stop area as well, so my thought process on moving my stop to break even “early” was good.
USD/JPY – Long
USD/JPY made a push up this morning, and came up against a pretty strong resistance area. I looked for a trade right around that area, but price was kind of choppy, and I couldn’t find a good entry and stop. I looked around at a couple other things, but found myself looking at this again, at which point it had broken out of that resistance area. Price looked strong, and USD overall seems strong (they’ve also talked about it on the TD Ameritrade show), so I kept my eye on it.
Just before the break of resistance, price made a small 2-candle base, and shortly after the breakout came back to that area. The retest looked clean, and when I picked my target and stop (with an entry back above that small base that formed) my R:R was 2, so I set an entry order. Oh yeah, this was on the 1 min. chart, too, but the spread was low enough that I was comfortable with it given my risk level.
EUR/USD – Short
EUR/USD was another very weak pair — and I missed GBP/USD (despite running numbers, I never really found a pattern I liked or an entry/stop that gave me a good R:R, so I left it alone, but when I revisited it, price had pushed through my target), so I looked at this for entries. Price, as I mentioned, was weak, and on the 1 minute chart, was in a decent base. I zoomed out and picked a target, and when I came back to the 1m chart, price was on the move. I ran the numbers, using a market order as my entry because price was pushing down, and the R:R was there, so I pulled the trigger. As I’ve typed this relatively small paragraph, price pushed to 1R, where I moved my stop to break even, and then pushed down to my target for a nice win!
How’d you all do in the markets today? Let me know with a comment below. If you have any questions or feedback, please feel free to comment those as well! Thanks for reading and I hope to see you back soon.