Just a quick note to show you I’m still alive and kicking during the August holidays. Still no intra-day trading for myself but last week I took one end of day trade here on the NZDUSD.
1. On a daily chart my indicators are telling me that NZDUSD is approaching an area of being oversold. I am deciding to go counter trend on an end of day basis. I buy the NZDUSD at approx 10pm UK time on Thursday 12th August at 0.7092. My target is 0.7167. Price continues down overnight….a good example of how even when you believe an instrument is over sold or bought it can still continue for a good while in its original direction. Takes a long time to turn a supertanker…a bit like a currency in a trend.
2. Anyway I’m not stopped out and price puts in a nice reversal pattern (not seen on this 4 hour chart and even then I never saw it as I was asleep and not watching charts).
3. After its reverse price starts to move nicely up. Is this simply a retrace or is it a reverse? Who knows? Who cares? Just trade what you see. Price hits my target at 0.7167 for a nice 75 pips profit. You can see after this that it was indeed just a retrace as price hit my target then reversed and the original trend re-asserted itself. Always nice to switch on your platform next day to see a few cheeky pips in the bag.
Trading reversals on a counter trend basis is not for everyone and I would recommend a newbie staying well away (they won’t but I still recommend it). I myself am predominantly a dominant trend trader. However I do have a couple of very specific set-ups (like this one) that I will trade when they show-up….which is not very often.
Anyway Trade Well and enjoy the summer holidays.