Friday, March 7, 2014

Trading Week 03/03/14: Aussie trade idea.

Friday 7th March (10.50 pm! woops!)
A/U: I'm not sure I will get the pull back on the A/U trade.


E/U: price is now edging up towards the major triangle trend line on the monthly chart: 

E/J:  I have an Irish surname but no luck of the Irish here this week. I've spotted lots of technical trades and breakouts but missed most of them. I'm in the Cable but it has done little all week. I went long on the E/J after the triangle break but put in a buy limit order that wasn't filled. Price then took off without me. Now, price looks to be clearing off from the 143 level.

Friday 7th March (5.40 am)
A/U trade: I am going to widen the stop on this trade.

Friday 7th March (11.45 am)
I am placing a trade order in based on the bullish 'inverse H&S' pattern that looks to be unfolding on the A/U daily chart. The Aussie has made a daily candle close up through the 'neck line' of this pattern and I'm looking for a test of this key level before any possible bullish continuation:

A/U daily

A/U 4 hr

The theory with these patterns is that the suggested bullish continuation is equivalent to the height of the H&S. The height of this H&S is about 380 ~ 400 pips or so. This would suggest a target for any bullish follow through at up near the 0.945 region. Now, this is where it gets interesting! The Aussie is trading above the Cloud on the 4hr and daily time frame but below the Cloud on the weekly time frame. The bottom edge of the weekly Cloud could prove to be some resistance for this pair and this comes in at around the 0.94 region. This isn't too far from the inverse H&S target so it would seem like a good 'take profit' region:

A/U 4 hr Cloud

A/U daily Cloud

A/U weekly Cloud

Thus, I'm placing this technical based trade with the following levels:

Buy limit:  0.905,  Stop: just below 0.90,  Take Profit: 0.94
I'm risking about 50 pips or so for a target of a possible 400 pips.

I am aware that it is NFP and, thus, it is only a small trade and hence the fairly tight Stop. Trading is very risking on NFP. 

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