21 Jul This Week’s Swing Trading Round-Up 22nd July 2012
There are still a few possible swing set-ups in progress but only one trade was taken this Week.
Following on from the AUD:CAD analysis I decided to enter a short position based on TA across a combination of time frames, using the Weekly time frame for the longer term set-up and the 5 minute time frame for the actual trade entry with all other time frames offering something in support of the trade.
It later turned out that I’d incorrectly read the set-up on the 5 minute time frame and had to make a decision as to whether the trade should be instantly scratched or to run with it based on the bigger picture.
For now I’ve chosen to run with it, using Daily resistance at 1.0529 as the line in the sand. A daily close above this level will have me re-considering everything that has led to this trade. Even still, there is evidence that the trade is still the correct trade in the longer term, but a decision will need to be made as to whether I’m happy to run the position for an extended length of time and whether I’m comfortable with the amount of draw down that could occur. Chances are, if I have any doubts in the short term following price action over the next few days, I’ll scrap the trade for now.
There are some great trending FX pairs at the moment and I have to ask myself why I’m not positioned. Every morning I glance through EUR:AUD, EUR:NZD, EUR:GBP and they are showing new lows. I’ve always struggled to enter such steam- train trends, I never seem to get momentum trades right and always end up entering at the worst possible moment before spending Weeks riding out a correction, and by the time price does show a profit I’m so relieved I just take it, missing the next leg down!
USD:JPY was another great short candidate previously discussed and it has started playing out as expected. Talk of BOJ intervention has gone quiet but the risk is still there so we need to be careful with these trades, or at least contemplate guaranteed stop losses.
Going forwards there are a couple of things I’m watching, neither a ready for entry at the moment but as soon as something starts showing potential I’ll post up the details. If I have time tonight I’ll probably post up one or 2 anyway.
Hope you are having a great Weekend and in the meantime, I’m just about to pop out and watch the Olympic torch relay as it passes my home!