After some Months without seeing a single swing trade opportunity I felt comfortable with, I've finally taken the plunge with a GBP:NZD swing long.
Although its a choppy pair to say the least, the overall trend has been up for almost 18 Months now even though a glance at the chart doesn't immediately suggest that. Volatility aside, MACD and the moving averages do suggest a probable continuation of the ongoing move, which ideally will lead to a more sustained move higher.
As you'll remember in my previous post of 2 Weeks ago I gave details of 5 currency pairs each demonstrating early stages of set-ups I tend to follow before entering a trade.
As things stand I've not entered trades in any of them as yet. For one of them I missed the chance as the move began overnight therefore making the risk/reward ratio a little less favourable, one I forgot about, one didn't play out as expected, one still hasn't finished the set-up and one is very close to decision making time.
Firstly I have to apologise for the lack of updates to the blog. Hopefully you will understand that my life outside of trading has been really testing over the last few Months restricting my ability to spend the time I'd like to spend on analysing and taking new trades. Despite not taking many trades, the set-ups I've posted over the last few Months have in the main played out very well so I hope there's been some inspiration from those!
One new swing trade was taken this Week in the form of a EUR:AUD Swing short. In view of the risk attached due to there being very little technical confirmation that I'd be able to pull the trade off, I decided to close it and go flat into the Weekend with a view to re-opening it next Week when further confirmation is in place. The trade delivered 120 pips profit in less than 18 hours so the result was quite satisfying. If and when this trade is re-entered I'll post details in the comments section under the relevant supporting post.
Another quiet Week where I found it difficult to spot any high probability set-ups although there were and still are a few I keep going back to.
The AUD:NZD swing long was stopped out on Wednesday for a 180 pip loss. Within hours I became convinced it was going to rebound having taken mine and probably many other stop losses at the max-pain threshold, so I've actually re-entered the trade from 1.1895 and the trade goes into the Weekend showing a 158 pip profit. Defining an upside target is a little tough because its still hard to tell whether this is just a retrace within an ongoing down trend or whether a larger scale reversal is taking place. For now I'd probably guess at the former so the key here is to watch the moving averages for signs of them offering support or resistance and also for signs of them turning up.
Following overnight news that RBNZ have been selling NZD due to their belief its over-valued with a promise to continue intervention as necessary, I decided to take a closer look.
When trading this pair I find MACD very helpful. With regards to the long side, I would analyse as follows.
The Weekly candle is up against the 20 MA, quite a common retrace level in a Weekly trend. Also, my downside target of 1.71 hasn't been achieved yet so I'm not convinced a long term low is in place, but a medium term one could well be.
Sometimes the Markets get the better of me and no matter how much I analyse the situation there just doesn't seem to be an answer that can prevent the same occurrence in the future. Such an occurrence arose today with the NZD:CHF swing long.
This is the 2nd swing long in succession on this pair having taken profits first time round only to see another desirable set-up soon after. Having held this 2nd swing for almost 2 Weeks with absolutely no progress, last night I decided it was time for a closer look. The result of this was to effectively forfeit any further risk by setting the stop loss at break even.
It's been an interesting Week that has shown a number of potential medium term trend changes.
After shorting SPX at 1596 in a speculative manner based on that huge multi-Month Megaphone top pattern I've since realised there may be more to this set-up than first anticipated. The original analysis can be found here.