29 Jul This Week’s Full Trading Review, A Tough Week! 28th July 2012
As the heading suggests, I’ve taken a few new trades this Week, but have struggled or am struggling with all of them. It’s one of those Weeks where I’m left wondering if Markets are just completely random and only a look at previous trading results remind me that TA must play a major part!
I came into the Week with one open trade, an AUD:CAD short, but on Monday my Day Trading system gave a long signal on the 5 minute time frame, so I decided to trust this and close the trade for a 40 pip profit with a view to re-entering.
AUD:CAD did then go on to rally, but on Friday I re-entered short from 1.0525 simply based on potential resistance shown in the following Daily chart at 1.0529. We should know within a few days whether this resistance will have any effect on reversing the current trend:
Following analysis earlier in the Week on the triangle formation on the Gold 4 hourly chart, I bought the breakout on Friday which proved to be an incredibly volatile day eventually whipsawing me out of the trade for a loss. I entered the trade in the morning at 1619.7 and was very quickly looking at a 100 point profit. Gold later sold off hard to produce a 4 hourly bearish engulfing candle. Later on it rallied hard again, soon showing a 70 point profit. By that stage the volatility was making the chart a little difficult to read short term, and since I was recently stopped out of a GBP:CHF trade following a very similar set-up, I decided to move my stop to the low of the bearish engulfing candle. Later in the day the low of that candle was breached and I was stopped out for a -10 pip loss. I obviously didn’t play the trade very well, but Friday’s volatility was pretty incredible and I chose not to risk taking a larger loss. In the event, price rallied again after stopping me out, so the set-up still remains high on the watch list, but I need to see something that gives me more confidence before putting more cash at risk.
Here’s the chart showing the breakout, and you can see the break of the bearish engulfing low that finally zapped my trade:
The final trade of the Week is one that I’ve not had chance to post any analysis of, partially due to the fact there isn’t a great deal of Technical support to the trade, more circumstantial evidence showing previous examples of the particular set-up.
EUR:GBP gapped down on last Sunday night’s open. The trend is clearly down and if you remember posts from the 1st quarter of this year you’ll also remember I have a bearish bias here. But I’ve also noticed a pattern developing over the last couple of years where gap-down Sunday’s in oversold conditions have often initiated some quite powerful snap back rallies. And there you have it, that is the only reason for entering this particular trade. The chart below shows some of the more recent examples of gap-down Sunday’s and the snap back rallies that have ensued:
Because of the limited technical support to this trade, I will stop the position out on a daily close below Friday’s low. My entry is from 0.7832 and the position goes into the Weekend showing an 8 pip draw-down.