Category Archives: AUDUSD

GBPAUD DST Short – 4 May & 10 May

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Risk: 0.55%
Short: 1.7350
Stop: 1.7396 (46 pips)
Target: 1.7236 (4h50, 114 pips, 2.47 RR)
Mindset: Nice set up. Feeling positive after my catch-up with Charlie.

Update – Stopped out – 4 May
Setting up, but staying out – 5 May
Having another attempt – 9 May
Stopped out again – 9 May
Set up still valid, going in again – 10 May
Booked my first profit in 9 losing trades – 23 May

Another set up I like the look of, the divergence is a double divergence now. I had a go at this one last swing high and lucked out on the second attempt to bag a winner. So I was pretty keen to take this trade. However, I got in early on this! I took the hourly chart as an entry and the 4h chart hasn’t actually set up!

I did take a look across the GBP pairs to see how the other pairs were setting up.

Here’s what I saw.

4H Chart – set up

GBP 4H Charts – 4 May

These three charts are diverging nicely – the GBPCAD and GBPUSD seem to have already started to break down. The GBPJPY (not shown above) is holding up fairly well – no divergence yet. The GBPAUD looks the best divergence of the charts to me (set up and risk to reward style).

See how it goes.

Stopped out – 5 May

Here’s the latest of those GBP charts.

GBP 4H Charts – 5 May

Price has headed higher, one thing I didn’t think too much about at the time was that the aussie was the weakest of the GBP pairs. Not sure if that is too big a deal – but I thought I should check the Aussie as well as the GBP against other currencies?

The AUDUSD is in a downtrend – just hitting a trendline. Looks ready for a (small) bounce, the EURAUD has run into resistance and looks ready for a pullback. Neither has a set up I can trade but I wonder if the Aussie’s time for a turn is soon?

AUDUSD 4H Chart – 5 May

EURAUD D Chart – 5 May

EURAUD 4H Chart – 5 May

The EURAUD is showing the start of a divergence set up.

The other Aussie pairs aren’t saying too much to me. I will keep an eye on the GBPAUD for more – proper 4H – set ups. That is, a 4H divergence with a confirming hourly divergence. I’ll be trading at minimum risk until I can hit a running streak.

Setting up, but staying out – 5 May

Macron Le Pen face-off

Today is the last day of trading ahead of the french election. Where le Pen and Macron go head to head for the presidential win. There’s a fair amount of debate about what change a president could bring – in terms of whether they could actually leave the Euro zone – but in a nutshell Le Pen = Bad for the EUR, Macron = Good for the Euro.

Polls suggest it is Macron’s for the taking but apparently the winner of the first round of voting doesn’t necessarily equate to the winner of the overall race. Of the last 9 elections, 3 previous presidents were not the leaders going into the second round.

I’ve got set ups I can trade now – on the EURAUD and GBPAUD which look like great set ups. But the shorts are out in force.

I think the analysis of price heading lower is correct but I’m sure it’ll be down to timing with this one. A win for Macron will probably pop the EUR higher before selling off. A win looks priced in to me – but as advised by Charlie – I’m keeping my powder dry for now. Staying flat over the weekend (It actually feels quite relieving!)

The first round of election results did ripple through all markets (even the AUDUSD). The GBPAUD gapped down last time (and I do want to get short) but any bad news could be punishing on a GBP short given the correlation of the EUR and GBP during the Brexit situation.

GBPAUD gap – 23 April. Not as big as the EURUSD but still a decent gap down.

Will be looking forward to checking price action on Sunday!

Going in again – 10 May

Following the results price hasn’t reacted much to the news. We’ve just had another spike up which has created a shooting star. We now have divergence on the 4H and Hourly Charts. The hourly chart is very undecided and choppy but both charts show a double divergence.

4H Chart – set up

GBPAUD 4H Chart – 10 May

1H Chart – confirmation

Shows the previous days double divergence. Just waited for the 4H to confirm the trade before going in.

GBPAUD 1H Chart – 8 May

Here’s my position now.


Risk: 0.55%
Short: 1.7593
Stop: 1.7653 (61 pips)
Target: 1.7327 (4H100 or prior highs – if I’m away, 266 pips, 4.36 RR)
Mindset: Not confident

The entry was very fortunate after the price action, I checked this trade at 8am but waited until nearer 10am to put the trade on. Early price action would’ve stopped me out! I’ve been hit a few times by placing trades in the morning only to get stopped out.

It’s been making me think that the hourly timeframe needs checking when entering a swing trade in the morning. Something to go back over and check. I’ve set my limit at the 4h100 but will move it to the prior highs if the trade is still open during my holiday. Looking at the chart I think it will meet nicely with the 4h100 whilst I am away.

Booked my first profit in 9 losing trades – 23 May

Finally! I winning trade. I’m not ecstatic – just relieved.

GBPAUD 4H Chart – 30 May

Price action has headed down to the 200MA. I’m happy with the trade as it was. Hope I get a few more 4x winners.

AUDUSD DST Long – 4 Apr

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Acc Risk: 0.6%
Long: 2x 0.7609
Stop: 0.7571 (38 pips)
Target 1: 0.7669 (prior high, 60 pips, 1.57 RR)
Target 2: 0.7716 (major resistance, 107 pips, 2.8 RR)

Well this is another one of those kick in the balls trades, that just goes against you straight-away (like it was waiting for the trade to be placed before showing you its hand). Price made a strong close inside the bands and I had a decent entry to get long but it just headed lower. Saw plenty of these situations in back testing so there’s not much to say.

One thing worth noting was the MAs were getting chopped around with price so the prior highs were my targets. Not had any trades that have been targeting prior highs so a bit of an unknown.

AUDUSD 4H Chart – 4 Apr. Red line was my entry, stop of the prior candlestick low.

Given the strong price action down, I think I’ll leave this one alone until price gets to the 4h500. See if we can get a long from there.

AUDUSD DST Short – 20 Mar

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Account Risk: 0.6%
Short: 2x 0.7725
Stop: 0.7758 (33 pips)
Target: 0.7641, 4H 50MA & 200MA (84 pips, RR 2.6x)
Mindset: Uncomfortable about this but trading the signal

Update 1 -Target hit – 22 Mar

I’m not too happy about this set up, it’s right into a resistance zone that has been tested so many times it’s surely gonna blow! However I resolved to trade the setups I see, when I see them so here goes!

Trepidation is my middle name

I also made a decision to reduce my stop size to 10 pips off the high or low. I did this because my risk to reward isn’t good enough and my winning trades are too small compared to my losers. At the moment my win rate is less than 50% so I really need to make those winners count and – although untested – I think I’d do better in the long run to take smaller losses and get back into the market later.

I’m working on testing this now by writing an EA in MT4 to do some back-testing.

Anyway here’s the set up, it’s not the best example of a divergence!

Set up chart 4H

AUDUSD 4H Chart – 20 Mar

Here’s that daily resistance zone

AUDUSD Daily Chart – 20 Mar

There’s also a divergence setting up on the daily but I’m trading the 4H setup.

I’ve entered two positions, targeting the 50MA and the 200MA both very close together.

Update – Target hit – 22 Mar

AUDUSD 4H Chart – 22 Mar. Nice touch on my target.

Well this has been the most uncomfortable trade ever for me. I blogged about a chat with traders interview which had some really good quotes. The best one was that traders need to be comfortable feeling uncomfortable. It’s so true. I didn’t want to take this trade and I wanted to close it a few times, but stuck to my plan and I’m glad I didn’t underperform the strategy this time!

It’s my first trade which has banked over £100 profit for me. I know it’s small fry but it’s nice to hit that milestone. Hopefully there are many more to come!

AUDUSD Set up – 23 Feb

I really want to take this short trade but as it currently stands the entry is too close to a major resistance level for me to be comfortable.

It’s a really tough decision given the triple divergence but I just feel it would be stupid to put a 20 pip stop off the high to coincide with that exact level of resistance.

Here’s the set up on the four hourly.

A triple divergence in play BUT price hasn’t hit the upper trend line or the prior resistance level.

I would typically be looking to take 2x positions at the 100MA and the 200MA as targets.

To mitigate this nearby resistance level I considered putting on a 40 pip stop, to give me more breathing space, but that blows out the risk to reward (goes <1). It would also just feel stupid to risk more. In these early days of trading a new system I don’t think it would do my confidence any good to break the odd rule just yet.

Price has recently broken out of a monthly channel going back 4 years. So a trade down to retest the monthly upper channel (blue line) would be a great target – but I would only run the trade to that level once I’d booked some profits on the majority of my position.

So I’m standing aside for now. I will wait and see if price wants to come higher (whilst diverging) to enter the market. It might not, but I wouldn’t be happy to have a wider stop or place a stop right on the resistance line.

Here are the higher timeframe charts

Monthly

Long term trend line recently broken to the upside. Could a retest be on the cards?

Weekly

Price has been in a sideways channel for 18 months. There’s also a weekly divergence in the making.

Daily

A divergence might be setting up here too.