25 Dec Weekly Swing Trading Round Up; 25th December 2011
In General the Week ended with results appearing to be positive but after removing day trading figures the end result was relatively weak on paper.
From a swing trading perspective the technical picture looked relatively promising but in reality proved to be unreliable based on my own risk/reward parameters.
GBP:CAD was stopped out for a 70 pip loss. I still have belief in the big picture but if I’m to continue my aggressive approach of trying to pre-empt the move then I will have to run wider stops, the alternative being to wait for confirmation of a break-out before entering.
The GBP:JPY break-out turned out to be a fake-out, in the short term at least and that position was also stopped out on the break of the previous day’s low for a loss of around 50 pips. In reality, especially seeing that my entry was near previous resistance the stop loss positioning was based on paramaters developed as a part of my intraday system and for a swing trade stops should have been lower which would have kept the trade running albeit now at a greater loss. I continue to watch this pair in view of it printing a higher low where a re-entry may become feasible.
NZD:CHF was a swing position I’d held for a few Weeks. As the trade developed and the bearish technical’s become more neutral I was pretty close to giving up on the position to close out when it was showing an 80 pip profit but eventually chose to simply set the stop loss at breakeven and see what followed, but was stopped out at break-even within the following 12 hours.
Having entered AUD:NZD a little later than originally planned due to illness at the time the favoured entry materialised, the trade remains in it’s early stages and I’m keeping an eye on it intraday to enable a quick exit if technicals become neutral to bullish. At present the position is showing break-even at 1.3111
I entered a short on EUR:AUD as it convincingly broke it’s previous all time low. Risk:Reward at 1:1 isn’t my usual trading style but I have seen similar breaks that just continued….and continued, so it’s a little speculative entering where I did and I doubt I will stick to the wide stop losses required to correctly run this position and will more likely close out on any decent reversal with volume behind it as it’s currently drifting down on low volumes. This position currently shows a 40 pip profit.
From a day trading perspective the FTSE produced a wonderful bullish break-out and backtest which formed the basis of a great trade that continued as the low volume “Santa Rally” got going later in the Week. This chart with the Bullish Falling Wedge and subsequent re-test sums up the move perfectly and shows how powerful some of the most basic technical’s can be:
In summary the last Month or so has had many ups and downs with a string of small gains, small losses and a number of break-even stop-outs. In reality much of this has been through my own distrust of running wide stop losses whilst extremely volatile data and various rumours flew out of the Eurozone causing correlations to skew and prices to either ignore or rapidly change the technical picture. Trading in this environment requires one of 2 approaches – sticking to your guns and running wider stop-losses to absorb the volatility, or, to run trades on a much smaller term basis taking quick profits as they appear. Although I’m quite adept with trading these scenarios, neither really fit the aim of this blog which is to take a more hands off approach to trading larger swings, but only if the conditions of maximum reward and absolute minimal risk are on offer.
It’s not likely that any great new swing trade set-ups are likely to occur until the New Year volume starts kicking in, but as always, I will report details of anything interesting that crops up in the meantime.
Wishing you and your loved ones a very Merry Christmas.