Its my first time trying to upload a screenshot of my chart on here so please let me know if it worked! Just wanted to get opinions on this NZD/USD chart. To give you some background I am new to trading and am just demo trading at the moment. I am not using many different indicators as of yet, just fib charts, daily pivot points, support/.resistence.
On this chart I saw that the 50.0 fib level (from a daily chart sell off from Aug-Nov 11) has been given support since the start of march. It also had the main daily pivot point just above it yesterday (moved a bit now). Also the red support line was taking shape as shown. I put a Buy order in for on the 50.0 fib line (48 profit target) and stop below the March low.
My questions is without using many other indicators what other kind of things do I need to be looking for? I am just trying to get in the mind set of what to look for before placing a trade. As I said i am new at this so please go easy on me!! This trade obviosuly did not bounce of the support as i thought it would so I want to learn why??
You are looking to exploit an edge in the market. You will win trades and you will lose many trades you just want the difference between the two to be positive.
One trade that didn’t go your way doesn’t mean there’s something wrong.
Ok thanks for the reply. I dont know about other new traders but i find it hard to analyse what went wrong with the trade(and why it worked). Thats why i thought posting a few of them may help if you exprerienced traders comment.
Sorry but I dont really understand this. I thought the 2 pink lines by the 50.0 fib line was the support area. I thought this because the price has tried to break through this level 4 or 5 times. Could you explain why you think it is not a support area? Thanks
Because the price went down, and you guessed wrong. No magic answers. Even strongest support/resistance/trend lines/fractals/fundementals gets broken time and again.
I understand that a lot of the time the trade will not work. The reason i posted was i was wondering what you experienced traders do when it happens? Do you just firget about it, do you try and find reasons why it failed, etc etc.
It seems to me that if we just say it was a bad trade and move on we are never going to learn anything! This could be as i come from a poker playing background (which actually has a lot of similar aspects to trading) and when things go bad you spend a long time analysing why.
your pink lines shows a resistance level preventing the price from increasing further and also a support level as the price deceases. once the price breaks through the resistance it becomes support.
the trade could have gone 2 ways. it either bounces off the resistance and stays in its range bound/counter trend or it breaks out and breaking out usually means more profits (over the short term anyway.)
Thanks that makes sense now. So it seems my mistake was to assume the price would bounce of it. Instead i should of been prepared to go short or long depending if it broke through the support.
First if you feel you want to trade the NZD/USD you should take a look through the forum below,
there you will find that the NZD is one of the comdolls. (google that)
what other kind of things do I need to be looking for
Also you should keep an eye on the fundamentals, ie AUD reduced their interest rates by
half of one percent.
This trade obviosuly did not bounce of the support as i thought it would so I want to learn why??
That is what the support line is for, to give you frame of reference to make a decision
on which way to trade, you chose to go long on a bounce, the market decided fundamentally
that it was time to break through the support. Your next move should have been to wait to see
if it broke back through or bounced off that support which has now become resistance
& carried on south, which it did.
Now the question is will it bounce off the 0.8000 & come back north or continue on down.
Also remembering that tomorrow (Friday) @ 1330hrs UK time it is NFP day.
