Live Trade – NZD/USD

Filed under: Live Trades |

Well, I’m afraid that February is turning into a real stinker with regards to results, wiping out virtually all of our January profits. With six trading days still left in February, it could still be turned around with a couple of good results – but at the moment, it is not looking very positive. Today, I am going to talk you through yet another losing trade, and explain my rationale for putting the order in.

 

Figure 1.

Figure 1.

To begin with, take a good look at Figure 1. This is the daily chart for the NZD/USD pair, which is the exchange rate between the New Zealand dollar and the United States dollar. What you can see is a very nice area of support/resistance in the middle of the chart, and as price was approaching that level, I was on the lookout for any bullish price action signals. This level was also a 50% Fibonacci retracement area – which added some confluence to the level.

 

Figure 2.

Figure 2.

If you now look at Figure 2, which is the 4-hour chart for the same pair, you will see that a very nice bullish pin bar formed right at the level in question. Therefore, I decided to 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 of two and a half times the risk. However, as you can see, this trade did not come off and the stop loss was abruptly hit before rejecting the level once again. I wouldn’t say that this was a bad setup exactly, but I did have some reservations when putting in the order, and as such, perhaps I should have waited for some added confirmation such as breaking above the high of the pin bar.

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