Thursday, February 17, 2011

A day of Whiplashings


The last few sessions has seen the AUD in a trading range - on the dailys, and on the 50 min. Despite the obvious ranging markets, I've tried to trade breakouts on the 10 minute markets with marginally poor results.

I had 3 trades last night exclusively on the AUD and they were all fakeout trades.

I had a long bias on all trades, as I believed the china inflation data was the main reason for yesterday's weakness, and a rebound was possible.

First trade entered at .9972, a HS on the 10 minute and a breakout was good enough. The target was 1.002 so initially it looked like it was set to hit, however the price swing fell short of 1.00 - and whilst I was out to lunch, the market took out my adjusted stop @ .9980 for a $31.70 profit - way short of my $200 target.

So I waited and saw an opportunity to trade the 1.00 break - this is a key level that I think the markets are watching and the markets are ranging around this mark - I felt that the move could resolve quickly to the upside so I got set @ 1.00 - only to see it smash in 30 minutes all the way back down to .9980. I was stopped out of the second long trade.

Third attempt saw me re-enter the position because I saw the prices hold up well at the .9980 mark, the market soon rewarded me with a swift move back to the 1.00 level - where the prices stalled near resistence. I had a feeling that the market would break through this level - it was just a matter of time. However I got tired, and as the market started to weaken, my fatigue got the better of me and I close the trade at a small gain.

As we see by the remaining bars, the market did ultimately move higher, and the level of .9980 held up overnight - perhaps the bottom of the 50min trading range - which I have called the blue ball zone. The blue ball zone is where a girl will hold u up, for as long as humanly possible from giving you action, to prove your manliness. Tonight I proved to be a boy blue balled.

The overall trade was a net loss of -52.82 - reasonable given that my expected target of 1.0002 would've been hit way earlier in the day in 1 trade, had I not been so hasty to move my stops to protect my profits.