This Week’s Swing Trading Round-Up GBP:CAD And DAX; 6th October 2013

This Week’s Swing Trading Round-Up GBP:CAD And DAX; 6th October 2013

As the Week began I felt quite content in continuing to run both GBP:CAD and DAX swing long trades but the short term picture for both has changed, drastically so for GBP:CAD.

Being committed elsewhere on Friday I didn’t even log into my account so you can imagine the shock when I logged in after market close to see GBP:CAD that had been showing a +300 pip profit now showing a -160 pip loss! It’s unbelievable how much damage can be done to a great trade in a single day, and I absolutely didn’t see it coming.

For GBP:CAD I had been targeting a fib level on the Daily chart in the 1.7070 region but hindsight suggests I possibly should have been watching this rising wedge on the 4 hourly time frame where for now the break-out is deemed to have been a fake-out:

GBP CAD 4 hourly 7th oct 2013

I will still continue to hold the trade based on the analysis I carried out on the Daily, Weekly and Monthly time frames, but if we see a back test of the lower trend line and price gets rejected, I’d seriously consider exiting the trade with a view to re-entering nearer 1.6200

The DAX trade hasn’t been quite so bad and continues to show a profit of around 150 pips. It’s clear that DAX has remained the strongest of all major Indices and that supports my reasons for taking the trade in the first place. Again, that trade was taken on exceptionally long time frames (Monthly), but looking at the 4 hourly time frame and I’d be surprised if we’ll see new highs anytime soon.

My expectation would be a correction to come and test the middle of the old 4 hourly trading range in the 8350 to 8400 region as shown in this chart:

DAX 4 Hourly 7th Oct 2013

For now I’m undecided as to whether I should bank the DAX profits with a view to re-entering the trade again in the 8400 region as its difficult to be certain how deep the current correction may go so I’m just watching and considering things for now.

With the above 2 trades running I’ve not really considered any additional trades but will probably have a scan through the charts over the next couple of days and detail anything that looks interesting.

In the meantime, I hope you’re having a good Weekend.

  • Olu
    Posted at 23:24h, 06 October

    sorry about the gbpcad trade. There was unprecedented weakness in gbp last week especially Friday. I couldnt help but smile at the scenario you described as I have experienced it with the dow being up 60 points and getting home 45 minutes later stopped out -75. What chan you do but smile in anger?

  • RS2OOO
    Posted at 22:58h, 07 October

    Under normal circumstances a sell off like the one seen in GBP:CAD on Friday would have further selling to come.

    Although GBP:CAD rallied today, 4 consecutive 4 hourly candles failed to close above the resisting trend line as defined in the above chart as a rising wedge.

    Having seen a 300 pip profit turn into a 160 pip loss in just 1 day, I viewed today’s rally as a good opportunity to scrap this trade taking a small profit of +12 pips.

    You are welcome to shoot me down in flames for not sticking to the original trading plan, also for not taking 300 points profit when it was available, but we live and learn and for now I’m pleased to have exited the trade without a loss.

    In the longer term I am still interested in this pair and may take another stab at it over the course of the next Week or 2.