Live Trades – AUD/USD

Filed under: Live Trades |

 

We had a good trade on the AUD/USD pair yesterday, resulting in a 300 GBP rise on our bank. Unfortunately, that trade is not currently showing on the MyFxBook publisher, as I had to reinstall MT4. I will send you the new link for that when it has been verified and you will be able to see my account activity again for the past year and a half. Until then, I would like to take you through the ins and outs of this trade.

 

Figure 1.

If you look at Figure 1, you will see the daily chart for the AUD/USD pair. What you will see here is that the pair had been in an uptrend, with the 8-day exponential moving average crossed well above the 21-day exponential moving average. However, recently, these moving averages started to move closer together, until they finally crossed. This cross also converged with price breaking through a significant area of support/resistance (which I have marked in with a horizontal green band). This was a good breakout so we put an order in to go short at a 50% retracement of the breakaway candle, with a stop loss placed just a few pips above the high of the breakaway bearish candle, and a target of three times our risk.

 

As you can see, our order was filled on the second day (and I would not keep this order in for more than a couple of days) and then price continued to move down and our target was met quite comfortably for a very nice 3% rise on our bank. This kind of trade is great to get in on, because we are going with the current momentum, getting in on a very obvious change in market sentiment, and we are able to line up a very nice risk-reward scenario, as there is plenty of ‘space’ for price to move in to. That’s it for this week – and I’ll be back next week with more trading examples.

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