I was on my own in the office today. The others said it was too hot in the office. We need more air-conditioning units!!
Woke up at 4am (went to bed at 9.30pm). Arrived at the office at 5.30am.
The last two Fridays were bad trading sessions for me, so I was going to be extra careful today.
Took two setups early in the morning – one on EURUSD – on which I got stopped out within 30 minutes. And the other on EURAUD – which stayed open for 5-6 hours and was a +2R trade. I also managed to re-enter on the 5M chart for a portion that I had earlier closed out on for profit.
Midway through the morning I also took a short on GBPAUD – on which I did not strictly comply with my entry requirements, but on which there was a very nice descending triangle on the 15M chart with the base on the Daily S1 line, and with the double 00 level sitting 20 pips below, and sure enough this ended up working for me – though if I had waited for price to retrace to the EMA10/20 then the trade would have been even better in this instance.
Following that I waited around and prepared for the CAD news at 1.30, and entered a short NZDCAD a few minutes after the announcement, following a strong CAD figure (or at least a bullish CAD reaction to the figure) combined with NZD being the weakest across the board heading into the figure. I had actually wanted to split the risk 50/50 across NZDCAD and GBPCAD because GBP has also been weak ahead of 1.30pm. I did not do that because price was too far from the EMA100 for GBPCAD on the 1M chart. Recall that I primarily look at the 1M chart for the news trades. The NZDCAD produced a scratch result due to my aggressive stop tightening.
So overall a profitable day – up around 2R – that was the only profitable session of the week.
Key points to note from today:
- Position Management – how to manage the stops on profitable trades – each of GBPAUD, EURAUD and NZDCAD traded a significant amount into the anticipated direction, but only after I had put myself on the sidelines as a spectator, thanks to the levels at which I had placed the tightened stops. There is no right/wrong answer to this. Paul (my trading coach) suggested that I should use a mechanical approach for doing this for now, and that i should apply that method consistently from trade to another – this will save me stress and anxiety. I did not do that this past week. But I want to and I will!!
- Market Reaction to CAD news at 1.30pm – the market had been fairly muted most of the morning, which is to be expected given that it was a Friday, and that it was quite light in terms of Tier-1 news. The only potential catalysts were the geo-political events in Israel/Gaza, and the downing of the Malaysian Airliner. [The market’s interest in Iraq and the general Ukraine situation seems to have dried up for a bit – trying to understand the FX market participants seems to be a fruitless exercise!] When the CAD news came out, it sparked some volatility in the CAD crosses – which is to be expected. However, within less than a single minute the market was hugely in demand for the Aussie and was selling Sterling across the board – big moves. I don’t understand why the Aussie would take off so massively on the release of CAD news? And you just wouldn’t expect that on a dull Friday session. It was an interesting observation. So I wanted to mention it.
Following the trading session, and watching today’s stage of the Tour de France, I met up with a fellow trader, who visiting London from Amsterdam. We had a good “FX” catch-up over a beer and some good healthy juice. Many thanks for a nice couple of hours Miss V!!