Since I have been getting a lot of messages as of late asking about how I trade the Aussie I have decided to start a thread. Since to com dolls section does not get much activity I figure this is a good place to bring it to bring in more interest to this section. Before I get started there are some things you should know before hand. Although my way of trading is different than most you will not find a single concept in my trading that is not already on babypips somewhere. I have stolen every concept from one thread or another on this forum. Some concepts have been tweaked to fit my style of trading and other concepts were good straight out of the box. I am not going to steal (at least not trying to) any credit for these concepts and will refer you to the other threads from time to time. There are 2 main threads you will need to know of to understand my trading and the concepts used.
The first is a thread by Nikitafx http://forums.babypips.com/newbie-island/39634-pure-price-action-dummies.html
You will need to know and fully understand (if that is even possible) price action. As That is a foundation of my trading. There are other threads popping up lately on price action that have good stuff on it. However I was a contributor to this thread and I like what the thread has to offer. I do not use everything discussed on the thread but it is golden to understanding my trading style.
The second thread and of equal importance is by ICT (Inner Circle Trader) http://forums.babypips.com/newbie-island/36328-what-every-new-aspiring-forex-trader-still-wants-know.html
On this thread you will get a great head start on the tools I use as reference in my trading. Again I dont use every concept on this thread in my own trading but consider every concept worth there weight in gold. When these concepts are combined with my style of price action results can be amazing.
I only trade 1 pair the Aussie Dollar (AUD/USD) and I only trade in one direction (short). The purpose of this is to keep my life simple. Instead of going through trying to find trade setups and what pair has the best setup and what direction is the pair going. I prefer to keep it simple and just wait for my set up to come to me and then I take it. Keeps my focus in check and zeroed in. Instead of spread out over a wide range. Just like a sniper. A sniper knows his target and hunts it. Snipers care not for any other target but the one they are after. The rest is just a distraction.
Now before we proceed any further I must warn you. If you intend to follow this it will take extreme discipline and extreme patience. I can say that only shorting any market is a loosing strategy and I can tell you that you WILL loose money. Even though I can show you how to profit off a loosing strategy this is not for the faint at heart. If you are that person then look at another thread or take up knitting (recommended). THIS WILL REQUIRE DISCIPLINE LOTS OF IT.
Now this brings me to the first lesson and most important lesson a trader will ever learn in trading. This concept is risk management. I know you all have herd it so lets move on right? Wrong lets take a step back and revisit this. Especially when going short in bull markets. Again the Aussie has been in a bull market for almost 10 years with only a couple retracements along the way. As I have said already shorting bull markets is suicide unless you have impeccable risk management and extreme patience and discipline. So there are 2 videos I want you to watch from ICT that I feel explain what I would try to get across better that I ever could. You will see me refer you to others threads on here all the time. As I am not a mentor, a teacher, or a signal service. I am a trader. I trade not teach but I will go out of my comfort zone and give the people here what was given to me. If I need to slow down or dive deeper into something then please dont be afraid to ask. You help me I help you. Anyhow enough rambling the to videos I want you to check out first are Forex Risk Management - YouTube Handling Losses and Inevitable Drawdowns - YouTube
HEHEHE its nothing personal but they are the ones I set my sights on. Also here in florida we have a problem with alligators so I like gator tail. Always wandered what a croc would taste like lol. We actually do have them trun up in our waters from time to time. Its not uncommon. Some even suspected to have traveled as far as from the great outback. Not sure how they get here but they keep showing up. Got to love the over grown lizzards.
It’s very good to see you start a thread especially on AUD/USD. I hope you analyse and post analysis the mentioned pair everyday. LOL…
Waiting for more…
Whenever I spot a trade idea on AUD/USD, I thought to ask you about the signal strength. But I afraid. I think this is the best place to ask questions. Lets trade together.
Good to see people are interested. I will get back later on a few more topics. Also I went home for lunch and entered a short off the retest of Pairty. Kind of a risky trade seeing as how the daily has not closed below it yet. However I will show as to why I entered and what the results are later. Has a pretty tight stop so could get stopped but if it dont it might look like a nice entry.
The next topic I want to touch on goes hand in hand with the first one STOP LOSS. I consider it more trade management than money management. If you watched the ict videos in my first post. He covers money management very well. Now once you understand how much risk to take on the trade and you have a possible entry (will get into that later) guess what your not even close. Depending on the trade setup my stoploss will be different (in terms of pips). To me setting a certain number of pips stop loss is a bad idea. If the chart is not telling you there is a reason your stop is safe then guess what? Its a sitting duck and so is your account. Now if you have the charts telling you your stop a most likely safe at X location that still dont mean its safe to take the trade. What I mean by that is it dont mean you can afford to take the trade. For example if you have a 1000 usd micro account and risking 2% on this trade you can risk 20 usd. This can mean you can risk up to 200 pips (does not mean you should). The basic idea here is if you get your stoploss small then you can up the pip value and make more money on any given trade. This concept is very important and will not be learned overnight. You will experience pain trying to get this down to a fine science (and when I do I will let you know). But once you do the rewards will be incredible. Generally I look for pin bars to form on the higher time frames at a S/R level and look to enter on the 50% retracement of pinbars wick. Well on the daily that is still a pretty big stop loss. Some wicks on the daily can be 50-100 pips. So look down to the lower time frames and with methods from nikitas thread and ICT concepts mixed with other pin bar setups on the lower time frames I have shown you all stops as low as 9 pips that ran well over 100+ pips. I am also here to tell you it is not hard to do psssh BS it is very hard to do. Remember this takes extreme discipline and patience to do what I am going to show you. I will also say if you are trying to become a millionaire find another thread (I dont have a million so how do you think you will make a million) unless you have the capitol to do so realistically. I will also say you will loose trades often very often if you cant take a loss then check the holy grail forums and good luck. However risking 10 pips to make 100+ I will say you dont have to be right very often to make money. IF you have to trade every day again find a scalping method for you. With this method you may make 1-2 trades a week (its all you need). Another thing I will show is my methods of entry and trade management and show you how most of the time even when your wrong about the market you can still walk away with out a loss.
I left the space above for a trade to show ideal trade set up using my pin bar method. I did take a trade today but it was not a typical trade. I will show it on the next post just to show some basic concepts I use to find my entries. Even with out a pin bar set up or candle formation at all. Although this does not happen often.
Here as promised is a trade I took on my lunch break today. The reason for entry was simple we broke pairty today and retested it. This level also lined up with the daily S1 pivot (not shown), the 61.8 fib (shown) and broke the bottom of the daily traders trinity but retested at this level (not shown), momentum is down. I didnt get a pin bar as I like but there was enough to enter. Since I could place a stop 10 pips away. The first chart I will show the fibs are incorrect. When I came home my power was off and laptops battery died. I tried to redraw the fibs but drew them in the wrong spot. I drew them off a swing that happened after my entry. The only reason I am even showing it is to show the original entry. The second chart the fibs are correct. It also shows my stop at break even and 1 lot cashed out. Since my stop was 10 pips I look to take my first lot off the table and move stop to BE at 1:1 so I needed 20 pips on this trade.
If after this retrace breaks the previous low I will move stop to the high of that swing (about where price is now). But as you can see even if I am wrong I make money. That is the biggest point of this thread. To show that it does not matter what the market does if you are nimble and quick what the markets want to do is irrelevant. You can get out with profits even when wrong (as in this case I think i am but what I think also is irrelevant). Hope this helps there are other reasons for this trade but thats a story for another day. For now if you have any questions please ask.
LOL I just realized after looking at this post the 2 charts do not match. The first is a 15 min chart the second is a 10 min chart. Trade was taken off the 15 min. Not sure I must have clicked the wrong tab and clicked the 10 min instead of the 15. but will not bother and fix it as you can see on both charts they say the same thing. There was no candle formations I was looking at.
For example if you have a 1000 usd micro account and risking 2% on this trade you can risk 20 usd. This can mean you can risk up to 200 pips (does not mean you should)
Still waiting a setup none as of yet. I was going to post an old trade but decided I would just move forward and not backwards. This way I can show the before (entry) during (trade management) and after (:)). I didnt even look at the charts this morning so I am not even sure if my short from yesterday got stopped out yet or not. If so its still a 1:1 trade if not grat but judging by yahoo finance I was stopped a few pips ago :). Not the best trade I even took but when ever I trade with out a candle formation as confirmation I do consider it a risky trade. That one just lined up to well not to take.
What a week so far with the EUR/USD and the AUS/USD, bearish, bearish and bearish. Europe is in a mess of uncertainty and all markets are down, thanks to Greece. It did not save at all the data from Germany. Investors are worried and the outlook is uncertain. However, for fx traders is a beautiful opportunity to make the most of our bearish trade against these two currency pairs. Happy trade
true unfortunately today I missed my trade setup. Hoping to see a retrace to get short. There really is nothing stopping the AU until 0.9800. And that was not since last year but was a strong number. Even this year the AU seems to like the even figures. What I mean by that is 1.0200, 1.0000 (even though it didnt stand up so well this time) 0.9800, 0.9600, 0.9400. Price like them round figures however keep in mind since price has not been down here in a while there are not many stops but many thinking we are way oversold (me to at this point even though I only short). Keep trades tight. What goes up must come down and what goes down must come up. That principle is what I call fundamental analysis. Not saying this move will not go on further but an end is coming soon. Besides that I swing trade with such step moves down its hard to get a swing to get back short on higher time frames if there is no swings as of late. But dont worry (I never do) markets will turn and set me up later with better swings. Till then I wait. I do have stuff to show but it is just not here today but great drop. Hope to see another sideline day tomorrow to retrace to almost pairty to set up OTE from the 1hr or about the 1.0080 to set up OTE on the 4hr. Not saying that going to happen but thats where I stand today. Guess we will see what the market have tomorrow I dont see much today. Or wait was a great day just not for me.
I agree price has loved all the even numbers thus far. Not that it doesn’t range on uneven numbers etc. I’m short on the Australian dollar as well. It just broke parity, outlook for Greece is terrible at the moment. Currencies are all linked together, so if the euro continues in this downtrend, I Believe it safe to assume the aud/usd will continue down as well. Do you trade any pairs together (same direction)?
I only trade the aussie and only short. But I do look at the cable, fiber, kiwi, and usdx. I do see the aussie bouncing off .9800 will see what happens there. Drops have been step and I have hit some nice swings along the way but I got tagged out and man its been hard to get back in. I do not chase price even though I am kind of kicking my self but hey it is what it is. Not the first time and not the last. I am happy I got a trade off pairty even though it was not great but my account is happy. I guess you could call it revenge trading as I remember it kicking my butt last year. This year I came back with a lot more to bring to the table and even though I thought it was going up heading in. What I learned (thanks ICT) told me I was wrong and it was not done heading south. This pair might be going down quick but the daily I can see a retest. If that happens Nikitas BPC will setup nicely and line up with everything else I have learned. Then we will have a nice swing trade and I will be waiting. I dont need to trade every day nor do I care to. When my trade comes I will take it. Other than that hope you all the best in trading its tuff. There is a bottom coming just when is the question.
Confident is the key to go back to track, unfortunately at the moment there is a lack of confident and optimism. Since yesterday morning I went short with the EUR/USD and has paid off so far 1:1 = 105 pips. With the Aussie/ USD, I went long since last week from 1.00981 = 185 pips 1:1. The reason for this, comes from a blend of economic data from Australia, concerns of China slowdown and the European crisis, which it has been supported by my trend line and breaking my resistances all the way down. It appears that the Aussie will hit the 0.98 sooner than later. It is happening…!
The way I look at it… And my interest bearing trades prove my point at the moment ( each are down over 100 pips)… Times are tough. Here, Europe, china… You name it. Since things are so rough and continuing to get rough, everyone has been flocking to lower yielding interest currencies aka usd! All of my trades this week have been against the interest differential and because of that I have yet to lose a trade. I too shorted the euro and made 100 pips today off the euro alone and over 100 pips on buying the dollar against various other currencies
There is a rumour going on about the Fed minutes later on…! Any idea about the possibility of quantitative easing proposal by the Fed. How that will affect the major pairs and gold, it could be the turn around for a bit. Any ideas? Cheers
