"Take Risks: If you win, you will be happy; if you lose, you will be wise. Nothing ventured, nothing gained."

Monday, January 11, 2010

11 Jan - Fundamental vs Technical Analysis, Aud/Usd

Watching the Aud/Usd tonight. I have been sitting down for about 2 hours plus and waiting for the quiet market which was ranging between 0.9310 to 0.9320. Reason i picked this pair? With support of various fundamental news on Aussie's gain with China's export that boosts the commodity currency. On top of that, AUD Home Loans announcement tomorrow morning 8:30am singapore time, which was good forecasted. decide to put on a longer term trade. another part of me was wondering if i am silly to follow these such closely?

With longing the aud/usd in mind, i was waiting for a good price. but there was a conflict of idea between my technical & fundamental analysis. while targeting a good price to go long, i have also been watching and waiting if a candlestick could close below the red 50 SMA line, for me to seek a short. i have conflicting fundamental vs technical analysis in mind. usually if i encounter such case, i would simply sit by and watch, instead of picking a side.

Indeed, right after candle closes below 50sma there was such a long bearish candle stick. Unfortunately, you can see my miserable green dotted lines, my buy limit hit. I set by my rules of not averaging a loser smaller than 10 pips away. part of the reason i allow myself to average losers (maximum 3 open positions) is that i have stop entering a full position at one trade. usually i divide them into smaller size lot and enter at different position. my take-profit are usually scaled out at different target, but usually stop-loss at the same level. this flexible way of trading has ease me a lot of pain and big time losses.

Although 'momentum of price' is neither categorized in the Fundamental or Technical aspect, but i still find it very important. without considering the momentum of price going down, i set Buy Limit, entry hit on its way down. my ugly entry slightly above half of the bear candle is now hanging there by itself. u could see how many torturous 15M sticks beneath my entry before things started getting better, a little while.

There was a sudden dollar bear momentum in majors (i always watch Eur,Aud,Gbp/Usd & Usd/Jpy concurrently whilst trading a single pair, sometimes small movement are cor-related) and greenback in Gbp/Usd & Usd/Jpy pair were rallying smoothly for a little while. But the Eur & Aussie was just not moving its asses.

Closed the torturous position at +5 pips. As always, i still need to work on an exit strategy.


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