Good Evening.
I am still long the NZD/USD from this morning currently sitting on 70 pips ( trade #4 ) . The trade was taken long from a channel that formed with the trend. Please see earlier posts. Some of you may be wondering why I have not closed this trade yet. The answer is found on the 4hour chart also mentioned previously.
If you look back the pair has been in a pretty good range (channel) for about the last 30 days. This range is about 140 pips. So in following with my rule of logic this was my logic behind leaving this trade on and moving my stop so I lock in 30 pips.
1) If I run a fib from the current high to the low for today the 38 fib comes in at 8241 and my stop is just below that which is a technically sound area for a stop using traditional technical analysis.
2) There is former resitance now turned support also located in that area (red dotted line)
3) There is now an uptrend that has formed on the hourly chart so I am riding this one with my friend (the trend)
So I have 3 good reasons to possibly ride this one out. The most logical reason I have however is....
A bird in the hand is worth 2 in the bush. I currently have a profitable trade. The pair is attempting to break a 30 day range (channel). That channel is about 140 pips. Given the channel rules. Which are... the break of a channel is equal to that of its range, there is the possibilty that I can earn another 140 pips. So my target on this trade would be 140 pips. I am risking 40 pips. Thats a 3.5 to 1 risk reward.
Will it suck to give up 40 pips yes. It would also suck to close the trade reenter and lose 20, or 30 on my next trade since in the end I will enter another trade and most likely my risk would be just that. So all I really have done is enter another trade and I am risking 40 pips. There is also another consolidation zone forming on this pair.
The one big ax hanging over my head is the CYN data tonight which will greatly affect my trade but I am locked at 30 so I feel good about that.
Oh and North Korea just launched one so that could bring on a risk off mood but again I have 30 locked.
I hope that makes sense.
I am still long the NZD/USD from this morning currently sitting on 70 pips ( trade #4 ) . The trade was taken long from a channel that formed with the trend. Please see earlier posts. Some of you may be wondering why I have not closed this trade yet. The answer is found on the 4hour chart also mentioned previously.
If you look back the pair has been in a pretty good range (channel) for about the last 30 days. This range is about 140 pips. So in following with my rule of logic this was my logic behind leaving this trade on and moving my stop so I lock in 30 pips.
1) If I run a fib from the current high to the low for today the 38 fib comes in at 8241 and my stop is just below that which is a technically sound area for a stop using traditional technical analysis.
2) There is former resitance now turned support also located in that area (red dotted line)
3) There is now an uptrend that has formed on the hourly chart so I am riding this one with my friend (the trend)
So I have 3 good reasons to possibly ride this one out. The most logical reason I have however is....
A bird in the hand is worth 2 in the bush. I currently have a profitable trade. The pair is attempting to break a 30 day range (channel). That channel is about 140 pips. Given the channel rules. Which are... the break of a channel is equal to that of its range, there is the possibilty that I can earn another 140 pips. So my target on this trade would be 140 pips. I am risking 40 pips. Thats a 3.5 to 1 risk reward.
Will it suck to give up 40 pips yes. It would also suck to close the trade reenter and lose 20, or 30 on my next trade since in the end I will enter another trade and most likely my risk would be just that. So all I really have done is enter another trade and I am risking 40 pips. There is also another consolidation zone forming on this pair.
The one big ax hanging over my head is the CYN data tonight which will greatly affect my trade but I am locked at 30 so I feel good about that.
Oh and North Korea just launched one so that could bring on a risk off mood but again I have 30 locked.
I hope that makes sense.