Hello,
I know this is very agressive, but I have taken 4 parts short in AUDUSD at recent high 0.9030-40…
am I blind? The only one who goes against bulls? 
Discuss with me your thoughts about Aussie.
I implemented a stochastic of 10,3,3 on a weekly chart and It showed signs of very o/b market. So I taken a counter trend trade.
What do you think…Is it good, is it horrible?
Your system Topchess so presumably you know exactly what you are doing and the parameters of your trade in fine detail. I am sure you know as well as I do how long oscillators can stay in ob or os areas in strong trends. Hope it works well for you but as an Aussie we are fully expecting parity with the US in the not too distant future - but then who knows? Just noticed that daily RSI is around 71 so hope you are not premature with this. As a warning about what can happen it hit 71 on 19 April last year and then [B]ROSE[/B] from 7487 to 7795 although max fall was then to 7268. Thats a wild ride over 10 weeks so hope you have a strong stomach!
Thanks for the comments
Yes the market can stay o/b for very long time… and I’ve seen this a lot, I do not like to rely on stochastic, I believe RSI above 80 more. But sto @99 is quite nervous situation… does it ever touch the 100 line? I just hope for a small dip/ gap/ whatever to take about 30-40 pips from this counter trend trade. I won’t aim or call for a top now. Well, btw the shorts were taken with very small lots and and stops in place. Maybe If this try failed, I will try 0.9100 or 0.9200…
You know, I feel this Aussie is going to make a steep correction. But as I said, I am not the trade who goes counter trend and call for a top or a bottom without any signs.
Especially with these bullish closes in 1d, 1w and carry surge. But let me reform the question. I rarely seen this kind of stochastic, well I only use it for divergence, but it’s about to touch the maximum line… so
I previously shorted AUDUSD from 0.9015 and it had a chance to drop to nealy 0.89. So I am trying to repeat the trades.
After consolidations it freed some space for another rally though, so I will break even any consolidation.
As they say, “To each his own”. I trade the Aussie and my indicators are very simple - uses only Keltner Channels/Envelopes. On the hourly charts, using the 144 period 0.2% and 0.6% extensions. From around third week of September, the Aussie has been well above the 0.6 channel, which is extremely rare (especially for such a long period). It got close to the -0.6% channel on October 3rd but has not breached. I’d say the trend is very strong. Not sure what the stochs were during this period.
Elliott Wave/Fib levels give me a target of 0.92xx before a retracement towards 0.87xx levels. EW is extremely subjective and has almost no predictive power - but I use Fib levels for projections (partial profit taking).
I’m not saying your decision to short is necessarily bad. Just that the trend has been extremely strong lately. While you might have timed a top extremely well, I am not the kind of trader who would go against such a strong trend (sadly, I took profits on the Loonie about 150 pips earlier, trying to time a perfect top).
Good luck !
Your projection is in agreement with my chart as well. I see scope for sub 0.92, but as you said – odds are for a return to 0.8700 as well…minimium retracement from recent rally. I could be too early to short now, I will either break even my entries, or add to my position on a rally.
Well… thanks for your comments.
Lucky coin…0.88 levels breached, looking at 0.87 mid from here… last target
Good one Topchess, glad it is working out for you
Wow. Not just the Aussie, but everything except the Loonie and the Yen are down big against USD ! The Aussie and the Kiwi show a 3 wave down (in the hourly charts) so far. It will be interesting to see if it will turn into a 5 wave down and/or a 3 wave up from here.
Watch NZDUSD daily chart, Monday. It formed a key outside bearish candlestick reversal pattern – very known pattern, and I am riding the short side of kiwi now after booking AUDUSD profit.
I tgt 0.7380 on kiwi … let us see