Live Trade – AUD/USD

Filed under: Live Trades |

I currently have a trade live on the AUD/USD forex currency pair, which for those of you that still don’t know is the exchange rate between the Australian dollar and the United States dollar.

 

Figure 1.

If you look at Figure 1, which is the daily chart for the AUD/USD pair, you will see the basic setup here, and it is a simple one. There is a level of support/resistance that price is bouncing off, and this has happened again with a nice little pin bar. However, given that the 8-day EMA is crossed slightly above the 21-day EMA, this was not quite enough as it was to take this trade.

 

Figure 2.

If you now look at Figure 2, you will see the 4-hour chart for the AUD/USD pair. What you can see here is that the level of support/resistance is very neat, even on this intraday chart. However, what I have also done is taken a look at the RSI indicator. What this tells us is that even though price keeps getting stuck at the same level, the RSI indicator is actually moving down. This is what we call a market divergence, as the RSI indicator is not doing what price is. This indicates that the move is losing steam, and that a market turn could be imminent.

 

In light of all of this, I put an order in to go short at a 50% retracement of the daily pin bar, with a stop loss placed just a few pips above the high of the pin bar, and two targets set. 0.7% of my capital was risked on a 1:1 RR trade, and 0.3% of my capital on a 1:2 RR trade. This means that if we get to 1R, then we are in a no-lose trade. That’s all for today, and I’ll be back with an update on this and more tomorrow.

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