Got a requote on NFP, but that thing swung so much due to all the data that it was probably for the best...
I shorted NZD/USD yesterday.... and now at -80pips. Lucky it was a small order.
I'm just about to give up on my own technical trading. I don't have the experience to be a speculative tech trader, but with news, I can be reactionary... and profitable.
Sorry to hear about the short Stu. Once my 4-hour chandle closed and I received confirmation on my 1-hour candle that key resistance had been broken, I decided not to take the trade - luckily it was a good non-trade. The pair is up over 100 pips in a couple days, so I would look for a bit of a retracement, but I doubt you'll end up profitable unless you hold for an entire week and something significant happens wrt the interest rate decision next week.
Stu.. Shard knows quite a bit about technicals.. and he's almost always successful. I am always disastrous at tech trading.. so I stick to news. Based on the inflated AUD/JPY (at 100.70) I shorted a small lot.. and the sucker went to 101!! So when you're shorting AUD or NZD.. remember that these are currencies preferred for the carry trade. So whenever the carry trade is up.. all aud/jpy, gbp/jpy, nzd, etc go higher.
Thanks
Music_Producer, you're going to make me blush.
Yeah, it's taken me years and years of trading on the stock markets to gain a decent handle on technicals, but I only use them sparingly, and with small lots. And you make a very good point wrt the carry trade pairs - they defy logic and fundamentals, so it's very risky to short them. But, as you say, all it takes is an event like the end of February and they will drop like a bride's pajamas on her wedding night.
It's hard call on the NZDUSD right now... I shorted on the idea that alot of reports are expecting a correction. IMF contacted our government and said 'cool down' on the interest rates (highest in nearly 10 years). But now some are expecting another rate hike to 8% (which I highly doubt)...
http://www.nzherald.co.nz/topic/story.cfm?c_id=167&objectid=10443024
I'm going to hang on the short with my small lot and wait for a correction.
With any trading you really have to pick a strategy and stick to it. A lot can hapen but you always need to keep clear in your mind the reason why you entered a trade and what your're desired outcome is. If the markets are telling you a different story, you have to listen and be willing to abort. I used to do the wrong thing with stocks when I first started. I'd short a stock based on technicals, it would reverse on me, then I'd pick a new exit point, or I'd think about doubling down, and I'd get all caught up in the fact that I was losing money. In the end, I had lost sight of the circumstances under which I initially took the trade - if I would have kept those in mind, I would have saved myself a lot of money by cutting my losses.
In your case, if you are truly shorting NZDUSD basded on what you hope the news will be next week, then that's fine - just don't panic in the meantime if the pair is volatile, and wait for the announcement next week. And more importantly, if the news is bad for you (i.e. a rate hike to 8%), don't chase your losses, don't try and force a winning trade and get the f*ck out of Dodge. Whereas if you were shorting the pair "just cuz" and now it onbviously was a bad decision, I'd get out. You were wrong. We've all been wrong. Live with it and move onto the next trade.
This brings me to a thought of trading psychology. TA and News are so very far apart to me in preparation, patience and execution. I believe I'm a news trader
Yes they are. That being said, they are inexplicably linked at times. Negative news will hammer a pair down, but "coincidentally" the pair will many times bottom out at a key support level, whether it's a double bottom, the 365MA, whatever. Odd...
The fact is, there are many technical traders out there who trade based on these types of signals. So, rightly or wrongly, or even if it goes against fundamentals, you have to keep this in mind as there are many traders out there who can sometimes influence the markets as such. For instance, thousands of short or buy orders are placed by the big institutions at key levels, thus making them very hard to break. Look how many times USDJPY hit 122.00 before it could actually break through...
That being said, if news is bad, if there are geopolitical or significant economic events, or if there is a surprise of some other sort, then no amount of technical trading will save you from the fundamentals.
But yes, preparation, psychology, etc. is completely different. You have to do what is right for you. Above all else though, as I've stated before, stick to your plan and exercise discipline. That is absolutely key in this game.
