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Wednesday, February 06, 2013

AUSSIE DOLLAR A TOUGH ONE TO CATCH




I want to go through a trade I blew this week just to keep things balanced in here. I mentioned I thought the Aussie Dollar was setup for a sell recently, so I was looking for a short entry. Be careful what you ask for.

My first entry which unfortunately was in the trading service, is indicated above, a short below the low of the reversal bar. At times these types of bars can be very good sells and as a result I got sloppy with this one. I should have waited for more consolidation and did not really use the correct amount of patience. I felt some pressure to get a trade going so I forced this one. Now that we can see a few days later how nicely this fell, it is easy to say well look at how that went down so fast.

However, it is always easy looking back, trading live is another story. On the next chart I show where the initial stop was and also a spot where it could have been. Had it been in the higher spot we would still be in the trade. However, the pattern I used for entry failed when the high of the entry bar was taken out, so that is where I exit trades. I exit where the pattern I used for entry has failed. We have to have rules and I stick by them come hell or high water and in this case it was hell, as it went up past the stop then slammed downward.

I did see another possible entry for Wednesday below Tuesday's low but thought the stop was too big for this market so I passed on the trade. Net net, I had a good setup, yet lost money on the trade I did to try and take advantage of it. I can't stand when people come out and always say I told you so and never show something like this. This is real and a dumb trade I made.





I still am not seeing a great deal of setups. I do think Bonds are coiled up tightly here where they should break out in one direction or the other. I think from a weekly stand point they are setup as a buy, but that does not mean the breakout goes that way. It is the way I am looking though due to the weekly setup.

Good Trading

5 comments:

Anonymous said...

Great to see some honest, real-life trading thoughts & info on this site.

I trade FX a lot and it's a volatile area (especially at moment). Just the other day I had a great set-up in EUR/USD, it went up, then slammed down hit my stop-loss only to rise again. LOL! As Chris keeps saying, this is trading folks.

Chris, seems to me you planned your trade and traded your plan - and that makes it a good trade!

Best,
- FXGuy

Rich said...

Is this the end of trading? Check this out:
http://peterlbrandt.com/the-e-u-transaction-tax-if-brought-to-the-u-s-would-mean-the-end-of-futures-trading-as-we-know-it/#comments#disqus_thread

Anonymous said...

Chris,
You were correct on the Bonds. From Thusday's overnight low, ZB is already up 35 ticks at 11 AM ET.
Today is also a dual TDOM (both couint approaches)up day and a "kick up" day in Larry William's Cycle Forecast. Terrific call and I made a few dollars.
Don in Virginia

Anonymous said...

What are your thoughts on Nat gas? I think if it holds around this price area (3.3) then it could setup for a rally next week. We are at support from a rising trendline as well. Would love to have your opinion. Thanks.

Chris Johnston said...

this has been discussed in congress for the last couple of years by liberals from I think Oregon who want to take away trading from individuals as does Buffett. I have written about this in here before. Will it happen? I don't know.

Those who think I exaggerated when I said 4 more for BO would cripple us are about to find out I was right