Trade Example – AUD/USD

Filed under: Learn Forex Trading |

I put a trade order on the AUD/USD pair last night (the pair for the Australian dollar and the United States dollar), which I have just cancelled, but I would like to talk you through this trade setup, and why I have cancelled it, right now.

 

Figure 1.

Figure 1.

If you look at Figure 1, you will see the daily chart for the AUD/USD forex currency pair. What you will see is that price had just made a very nice bullish pin bar. This also came at a support/resistance zone (marked in with a horizontal green band). Although you cannot see it on the screenshot, this zone actually goes back and is relevant for months. It’s one of those zones that is not easy to see as there is so much going on in this pair. However, once it is marked in, it then becomes very prominent, and you can see that it has been respected on numerous occasions in the past. Moreover, the level has also been respected very recently as well on two occasions as price first moved up (as resistance), and then broke through the level, and then again as support. Thus, when the bullish pin bar formed right at this level, 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 three times the risk (you can see these levels on the chart).

 

Unfortunately, my order was not filled, and price has since shot up and been within just a few pips of the intended target. When price reaches my target without having my order filled, I generally cancel the order, as the boat has been missed, so to speak.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>