Welcome to my investing and trading journal! This blog is where I share my thoughts on the financial markets (primarily Forex right now) and talk through the actual trades that I make. Today, I made a short trade in the Aussie-Kiwi Forex pair. read on to see how this trade played out.
AUD/NZD Short
Expected Entry – 1.077 Stop Level – 1.078 Target – 1.073 R:R – 4
Overall in this pair, price had been weak. It made a pretty strong rally then dropped, taking back about half of it’s gains from that rally. There was a bit of a rally after the drop, and I’m shorting in to that expecting price to take back the rest of what it gained over the last week. Here are my thoughts from this morning:
Aussie-Kiwi had been pushing down for most of 2024, until it made a strong spike up at the end of last week. That spike lasted until Monday night, when price started dropping hard. That drop bottomed out at the end of the day yesterday; and since midnight, price has been on a small rally.
I think I’m going to look to short into that small rally. Price has reached some resistance that was strong prior support, and the up-move doesn’t look extended at all, or like it’s returning to the upside. Dropping to the 2 hour chart, I don’t necessarily see a pattern to short in to, but I see clearly defined support and resistance where I can put my entry and stop orders. I’m going to pick a target and run the numbers, putting out an entry order if they’re there.
I’m playing this to at least the lows of the overall range that this is in, but I selected my target using the fib retracement levels to give me a more realistic exit.
Entry – 1.07698
Nothing happened immediately after setting the order, but I kept my eye on the charts and things continued to look okay. Price approached my stop level, but stayed a few pips below it. I took a break for lunch, but liking price action, I left the order out there.
While eating lunch I got the notification that the trade had triggered. The last time I looked at the chart, price was near my stop level, so I knew it had to have been a fairly strong drop to trigger the entry. I looked at the chart again, and sure enough, that’s what happened. I set an alert for 1R, which was exactly at the next key area, and just waited for price to reach that level so I could move my stop to break even.
That hit a couple hours later, and I know I wasn’t losing anything on this trade.
Exit – 1.07716
After hitting 1R, price started rallying and did so enough to hit my stop. That next support area held stronger than I hoped and price reversed from there. Even looking today (the next day, analyzing how this went), price failed at that exact same level again this morning.
Overall, I liked this trade. I liked the overall direction, the pattern, and I traded around price action rather than a specific base or pullback (I traded an longer-term pullback, but didn’t set my entry based on that). I broke even, which was a bit of a disappointment, but it’s better than a loss.
That rally up to the MAs, with my entry being at a clean break of a key area is almost exactly what I’m looking for when I’m trading. Couple that with a high R:R, on not-ridiculous numbers and I thought this was going to be a huge winner. It’s unfortunate that I don’t see that price action more often. It’s also a bit of a disappointment that it only broke even, but if I can get into more trades exactly like this one; overall, I’m going to be very, very profitable.
Thanks for reading! What did you think about today’s trade? Were you able to get a better entry and catch more pips? Let me know in the comments. If you have any other thoughts or suggestions, leave those in the comments too. I want to get better together! Don’t forget to check back frequently for more trades and analysis, too!