Strength/Weakness – June21

My AUDCHF closed out for full profit last night +265 pips +2.2R – in the space of 24 hours. My AUDJPY position is still open and is bouncing around – sometimes in profit, sometimes in loss.

Completed the STAM this morning.  Here are my comments:

Cable – S2B setup – price has made a nice reversal, am now waiting for bullish PA – I liked the Thu pin bar on the daily chart – either another pin bar, or enter on a Corn Trade basis. Not trading strength v weakness on this pair – should I therefore disregard this setup?
GBPCHF – although a S1S – the D chart over the last month looks horrible – there a lot of long tails without price really going anywhere. A trend-based strategy would have a lot of losing trades here.
GBPAUD – very nice trend. There was a retracement of some 350 pips. Arguably some bullish PA following the retracement – an inside bar and a pin bar. In an ideal world, would have gone long above the Jun17 pin bar with a decent size stop – this would have allowed to survive the FOMC candle and then go onto a winning trade. However there is nothing setting up on the chart right now. On the downside only trading 2-1 here – again not strength v weakness – could trade this types of setups with a lower unit of risk e.g. 0.5R or 0.33R.
EURAUD (5-1) – near identical comments to the GBPAUD pair could be made for this pair – potentially a missed trade. The difference here is that this pair is definitely strength v weakness.
EURGBP (5-2) – similarly to GBPCHF, this pair also looks very tricky to trade with a trending strategy, even though it is a good strength v weakness S1B setup.
EURUSD (5-3) – this also doesn’t look easy to trade. The pair has not been trending very nicely.
EURJPY (5-0) – this pair has mainly been trading sideways for all of May and June. I can’t see a setup on it.
Interestingly, looking at the FX markets in this manner – the number of potential setups quickly dwindle to a small number.
USDCHF (3-4, 1-5 on S2) – this one actually looks rather good. There has been a strong reversal and now a bullish PA – see big bearish pin bar from Thursday on the D chart.
CHFJPY – even though this also looks great on the matrix, it is more or less been trading sideways since the early parts of April. So this is not one I would be looking to trade right now.
AUDCHF (1-4) – still looking great, now waiting for another reversal in order to re-enter the trade
AUDUSD (1-3) – this one looked like a great trade, a good reversal followed by bearish price action on the D chart – I didn’t trade it because it was not strength v weakness – again, as for GBPAUD – could consider doing a trade here at less than full risk. Was there really sufficient bearish PA?
AUDJPY (0-2) – this trade is no longer strength vs weakness thanks to the weakening Yen, however I will now stay in this trade. However if I was looking at it from scratch I would have to assign a lower unit of risk
USDJPY (1-2) – I am weary of trading this one – the pair has really rallied a lot) – definitely we can say that a reversal has taken place, and that we should now wait for bearish PA. But the pair just looks too strong for me on the W (looks like its going to be an engulfing bar) and on the daily chart the pair has rallied every day this week.

In summary – the pairs in bold are ones that I most interested in and would be more likely to have a trade in. Anything not in bold is unlikely to trigger a trade for me in the next week. So thankfully that narrows it down to 6 pairs but most of it revolves around the Australian dollar.
Questions for my trading coach: Can I put on trades that are clearly strength v weakness – e.g. strength v mediocre, or mediocre v weakness – should it take both W and D ranking into account when judging the S1 and S2 setups? If I decide to go ahead with trades like that, should I use a lower unit of risk?

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