Long or Short: Short
Entry Point: .8400
Stop Loss: .8470
Profit Target/s: Initial target at .8300, Ultimate target at .8200
Reward-to-risk Ratio: 1.41:1 to 2.85:1
Risk percentage: 1%
Indicators used: Stochastic (14,3,3)
Trade Rationale:
China’s GDP didn’t boost the commodity dollars, which hinted that the high risk rally might be overdone. There’s also a really strong resistance and a possible double bottom pattern from the .8450 level on NZD/USD’s daily chart.
um…ur title(long) contradicts your post
as for the entry, so you predict prices will go back up then down???
btw my daily chart(fxcm) looks very different than yours
currently this pair is consolidating forming something that looks like a pennant or a wedge depending on how you look at it
when it breaks out downwards your entry might never hit
when it breaks out upwards, it’s possible to shoot thru the resistance you mentioned
also there’s super strong support at .827-.83 area
i think this is a sell in short term(couple hours-days) but most likely a buy in the long term (couple days-weeks)
anyway it’s just all my opinion, attached is pic of my daily chart from fxcm
Thanks for the heads up, Newbtrader! Already changed the title.
Cool charts too. I’m thinking of using this trade idea for only a couple of days so I hope I can adjust my trade to at least a no-risk position by the time it reaches your rising trend line. I’m thinking of possible catalysts to further buying of high risk assets though. Any idea on the economic themes?
im not too good with the economics
seems chinas going strong with growth rate
usd also seems to do fine although its debt is crazily high
i think once it gets close to the rising trendline, carry traders will buy at the support and hold for the interest
dunno…just a guess or my opinion rather
anyway, good luck trading
just looked at weekly to get a bigger view on this pair
but im leaning towards a breakout towards the long side
so a super long trade for me would be a
.85 buy (holding for weeks/months/years), very profitable since you also collect interest on this pair
and .81 short (only holding for days/weeks/couple months)
however when if it breakouts of .85, there’s alot of room to go higher and higher
on the short side, room to go lower is limited by support
meanwhile looking back at the daily chart, there seems to be alot of support at .823 - .83 area
which makes this pair seemingly looking favorable towards the buy side
if this pair falls below .83 area, i would call it the no trade zone, and then put a buy at .83 and a sell at .81-.814
sorry if my analysis is confusing,
after all they are all just nothing but my opinion
feel to criticize my plan if it seems fault at all
This is the 4 hour chart
If we look at this 4h chart we can see the market is currently consolidating
And it’s forming what looks like to be a falling wedge of some kind
Through Babypips school, I’m sure we’ve learned that falling wedge tends to signal breakout to continue towards the upside but of course not always, just likely
I already showed the daily and weekly chart for the long term strategy and big view
Looking at this 4hour chart helps us pinpoint a more precise entry and entry
When we are trading, we can often trade breakouts or within a trading range of both support and resistance
In the weekly and daily I leaned towards the bullish side, so i’ll only look for entries in the bullish side
Also if breaks out towards the bottom side…it’s hard to sell given strong support coming up very soon as discussed previously
Although it’s also possible to sell the breakout with a tight stop, it’s a matter of taste and preference.
The support I mentioned could never hold just shoot through like nothing especially some news event occurred during this time. However, I prefer to choose the side that offers the best odds with the most room to go in my favor than against
edit
I prefer trading with the trend than against, when you trade with the trend, you can make money while in your sleep, when you trade against a trend, it’s profitable as well but you need a lot more management, you need to be more precise in stop loss and targets and constantly monitor the trade since it could turn against you anytime.
Finally, if the whole trend reverses, then you grabbed the whole chunk of profit/pips since you entered exactly at the top/bottom of a trend reversal
Of course, both trend trading and counter trading has its own merits
It’s a matter of personal style, preference and trading system/method
edit
Looking at the 4h chart we can see there’s clearly support coming up soon
Here’s a trade that I would look at when trading the support line
Entry - at around .8335 - .835
Stop - at .83
TP - short term target around .837-.84,
mid term target = .845
long term = .875
super long term = hold on forever!
Also once it breaks out the resistance on the 4h, I’ll be adding position to this kind of trade
Then once it shoots past .85 i’ll be adding another position as well as dictated by earlier strategy
Of course adding positions toward this trade is just personal preference…
I prefer to add to my winning trades.
And if you don’t believe the support will hold, of course you can ignore my entry and just only buy the breakouts
Breakouts are a lot safer to trade than trading support line alone because support line doesn’t always hold
However, trading support line leads to bigger profits with smaller stop loss.
Trading breakouts tends to be more favorable but with bigger stop loss and less profits.
By looking at weekly, daily, and the 4h charts, we can locate the direction of the trade, then strategically identify support/resistance
Then finally pinpoint the exact entry/exit
Sorry, if i just took over your whole post/topic
These are after all just my own opinion and idea that I’m sharing with you
Not trying to say I’m right or you’re wrong or anything like that
Just trying to exchange ideas/opinions
And perhaps let us all learn something from trading
Since trading is a long and slow learn process, each trade is worth a lesson of its own
