[TW] 11-21-2011 AUD/USD Short by kluebirby

AUD/USD 1D Short

Long or Short: Short

Entry Point: 0.9950

Stop Loss: 1.008

Profit Target: 0.955

Reward-to-risk Ratio: 3:1

Risk percentage: 2%

Trade Rationale: Price action shows that the pair is on a downtrend. The pair recently broke below parity, if this doesn’t pull up in the near term it could mean the pair will continue the rally downwards. For this reason the entry point is set 50 points below parity.
If the trade rallies downwards we can expect it to reach at least as low as the previous low, therefore the take profit is set to 0.955. Depending on how the trade develops this could be moved down further.
Since we’re very close to the major psychological level of 1.0000 this trade could easily be invalidated if the pair ends above that line. Therefore the stop loss is set to 1.0080.

Trade Adjustments:
Since we’re shorting AUD/USD we need to be careful with not letting the trade carry on for to long. If the trade is initiated but doesn’t make progress quickly I’d consider closing the trade because of the high interest that needs to be paid.

I want to offer one minor modification for those interested in this trade:

The entry point I gave above (0.995) might not be ideal since it falls into the support area created by one of the previous lows (the light blue box in the image below). For this reason you might want to consider adjusting the entry to below that support zone, at about 0.9915.

This is working out pretty well as of the moment.

Yea, fortunately! if not you guys would have had my head ;). heheh…

The pair moved down quite rapidly yesterday, but now seems to have gotten stuck into a range. I’ve moved my stop loss to just below break even.

Of course not. It’s simply trade idea sharing, and ultimately, it’s our decision to take the trade or not! Thanks for the idea though. :slight_smile:

Super trade so far my friend. I’ve also moved my stop to just below BE and entered a second lot due to some hidden divergence off the H1 chart and it’s MACD.
Best of luck to us all:5:
and many thanks

With my second entry 260 pips and counting alooooha

Apologies if I am missing something obvious, but what is the significance of the orange/yellow boxes on your charts?

Thank you!


Those are master candles, i.e. if 4 or more subsequent candles all fit into the range of 1 candle. For breakout trading

Interesting, thanks for the response. Always learning on this site! Interesting trade, thanks for posting, I took something similar.


I’ve taken profit on this trade.
I have been monitoring the trade on the 4H time frame and have been slowly moving down my stop loss after each candle. I moved the stop loss to just above the recently formed doji, and ended up getting stopped out with just under 200 pips profit. Good enough for me.

I’d consider exiting this trade if you haven’t already. The price action is looking less and less favorable. If you look at the day chart you notice that the candles are becoming decreasingly powerful, and the most recent candle is a doji. I take this as a sign that the trend is coming to an end.

hi there, i’m totally new here in forex. i set my tp for AUD/USD at 0.9629 but the price rallies till 1.0080 high. Is this a retracement or reversal?