Live Trade – AUD/USD

Filed under: Live Trades |

I had a live trade on the AUD/USD forex currency pair yesterday, which for those of you that don’t know is the pair for the Australian dollar and the US dollar.

 

If you look at Figure 1, you will see the daily chart for the AUD/USD pair. This is the only timeframe that we will need to look at for this setup, as all of the information that we require is contained within this chart.

 

Figure 1.

Each chart tells a story. This chart tells us that price had been moving up quite well in a bull trend, before pulling back and gaining some bearish momentum. However, the 8-day EMA recently crossed above the 21-day EMA once again and challenged the previous high. Bulls were back in control. However, price could not break through the old high, and pulled back a little to a level of support/resistance that had some significance.

 

When price formed a nice bullish pin bar at this level (which I have marked with a green band), I put an order in to go long at a 50% retracement of the pin bar, with a stop loss placed just a few pips below the low of the pin bar, and a target set of two times the risk.

 

Figure 2.

Our order was filled and price did start to move up. At one stage, I was over 100 GBP in profit, and it was at this point that I moved my stop loss to breakeven – allowing me to be in on a risk-free trade. I don’t always do this, but on this occasion, I felt that it was the right move. My instructs turned out to be correct because the bears have since started to regain control, and my stop loss was hit for a breakeven trade (see Figure 2).

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