Trade Example – NZD/USD

Filed under: Learn Forex Trading |

I have a trade example for you today on the NZD/USD. There were a couple of setups that I almost sent out as live trade alerts last night, and this was one of them. In hindsight, I guess we’d been on such a good run recently that I didn’t want to spoil it by overtrading. However, the trade turned out to be a good one and as such, I perhaps should have listened a little bit more to my trading instincts (as we all should!).

 

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the NZD/USD forex currency pair. As you can see, the pair is chopping around quite a bit. When a chart is not completely visually clear with regards to the trend, what we can do for more clarity is use the moving averages. In this chart, the 8-day exponential moving average is crossed well above the 21-day exponential moving average, and they seem to be diverging wider apart once more, so there is a good deal of bullish momentum. Therefore, we are better off looking for any price action signals on the intraday charts that confirm this bullish momentum.

Figure 2 shows the 4-hour chart for the same NZD/USD pair. I have highlighted a pin bar at a significant area of support/resistance, which is the candle that we are most interested in here. When this was live, I was considering putting an order in at a 50% retracement of the pin bar, with a stop loss placed just a few pips below the low of the move, and a target of two times our risk. As you can see, this would have been successful for a nice 2% rise on our bank. That’s all for today, and I’ll be back with more tomorrow.

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Your email address will not be published.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>