[TW] 01-23-2012 AUD/USD (long) by pottermoar

[pottermoar]

Long or Short: Long setup on the DAILY chart
Entry Point: 1.0550
Stop Loss: 1.0470 (below previous resistance of symmetrical triangle)
Profit Target: PT1: 1.0700 (significant resistance level); PT2: 1.1000 (symmetrical triangle high)
Risk Ratio: At least 1.88:1 but can reach a maximum of 5.63:1
Risk involved: 1% of account
Indicators: None

Rationale:
Technical - potential break of symmetrical triangle, good reward-to-risk ratio, strong trend

Fundamental - optimism on China's data, comdoll strength, risk appetite in markets

Trade Adjustments:
I have two options on which reward-to-risk setup I'm going to play, so I'll wait for a few reports to be released to see how aggressive I should be in buying the Australian dollar. I placed a relatively tight stop on this one, so I know that my symmetrical trade idea would have been invalidated if price went back to my SL.

[ramlied]

Hi pottermoar,

I got in this trade earlier this morning. Do you think the pair will go back up or should I cut my loses now? If you think it will go back up, do you still feel confident w/ the 1.0700 tp level?

Thanks!

[pottermoar]

Hey ramlied,

Yup, I'm still confident about my PT1. I have already expected that price would at least retest previous triangle as a support. I would cut my losses if

1. It looks like 1.0500 isn't holding well as a support.
2. Stochastics on the daily chart is leaving the overbought area.
3. Australia's CPI comes in way weaker than expected.

Hope I answered your question

[ramlied]

That hurts, an 80 pip loss.

[mrpippy]

That hurts, an 80 pip loss.

If you are only leveraging no more than 1.5% of your account balance...there is no pain at all. All part of the doing business as an FX trader.