Oct2 – Market Analysis

Personal Reflections

As I observed yesterday, I need to be more disciplined in my approach to trading.  So I will focus on this today. 

  • Observe carefully and trade with your edge
  • Know your edge and trade objectively
  • Analyse & learn

Market Analysis

Equity markets had a fairly good day yesterday.  Gold tumbled a little bit ($30).

FX Market

No change between strong and weak pairs.  AUD is strengthening a little, NZD is weakening a little still. 

There’s news for GBP this morning, ECB rate meeting later in the day, and Bernanke speaks this evening, meaning that I will need to stay out of most trades.  Additionally there’s NFP on Friday.

However I did spot an opportunity in shorting AUDNZD.  This pair has done a nice 200 pip retracement, rallying out of the demand zone at the time of the RBA rate meeting early on Monday morning.  Some further AUD news came out early this morning.  Price has put in a big bearish pin bar on the 4H chart (the candle just completed at 7am).    I shorted the pair close to the market, targeting the middle of the demand zone.  See chart above.

Thus in summary: AUDNZD is a S1S setup, it is a weakness/strength combination, there has been bearish price action (on this pair as well as on other AUD charts), there are logical targets and stops and I can get a R-R of 3:1.

I will complete the remaining STAM analysis at lunchtime.

 

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