Review of the NZDUSD trading plan

In my last post, I mentioned the range with the NZDUSD pair. I was also bearish on this pair and it looks like the past few days are right on track. Rather than selling and holding this pair all the way through to the bottom, I have been making several entry and exits. Luckily for me, the Spotware cTrader platform that I use allows server-side trailing stops. So far, I have netted a mere 60 pips in two trades. I broke the trades down to a 15 minute time frame so you can actually observe the trend going on right now.

NZDUSD Trailing Stop Loss Hit
NZDUSD Trailing Stop Loss Hit

This trade could have been better handled if I stayed in front of my charts watching the move. For this trade, I used a much tighter trailing stop loss in anticipation of the economic releases. Hate to admit it, but it is true that technical analysis does not work too well in a fundamentally manipulated environment. It is still possible to trade with technical setups, but one must take a different approach. I prefer to rack up more spread and commission costs with lower time frame entry and exits. I rather trade a pair several times rather than riding it through. Others may trade differently. Because there is greater volatility, some may widen their stops and trade with a lower volume. If the price moves to the extreme and ends up hitting the stop, proper money management will contain the losses.

This is another trade that I took that also focuses on extracting small quick profits.

NZDUSD
NZDUSD

I actually redrew the trendline to accommodate my latest trade, but the old trendline was much closer to my exit. What happened was this pair sold off away from the trendline and stalled. Fearing that the short term selling pressure was over, I closed it off. This could have been better handled with a tight trailing stop loss, but my pip profit was simply too small to make it worth while.

Currently, I am in one more NZDUSD short based off of an redrawn trendline.

NZDUSD with Redrawn Trendline
NZDUSD with Redrawn Trendline

The 60 period simple moving average is working very nicely as a dynamic support/resistance level. Nothing wrong with indicator based trading, but keep in mind that my entry was not because of this indicator based setup. All I am saying is that it does not hurt to have one more method of confirmation.

 

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