Thursday, July 31, 2014

Daytrade - AUDUSD - 31 July 2014

This was taken not long ago during the Asian session. Price had settled after the first few hours of the Asian open and the release of major AUD news, so I was pretty confident of trading the resistance level shown. After the first 3 hours of the Asian session, price will tend to range and you'll get some reversals / retracements of big moves during the Asian open. I saw a good LVHV candle and went short on its break. 

I moved the trade to breakeven once price has halfway towards my profit target, but then I saw a (relatively) large bullish candle. I closed the trade here for a reward of 0.75R. To manage or not manage your trade? That is the question! I think moving your stop loss to breakeven once you're halfway to your profit target makes sense. But managing your trade beyond that? The only other time where it'd be prudent to manage your trade would be just before price hits your profit target. If price is hovering above your target for awhile and refuses to hit, it might be prudent to sacrifice a tiny bit of profit and just close it.

There were some good LVHV candidates earlier, which I marked. I also think it's sensible to take into account the context of these candles. You want them behaving as reversal signals. If they're stuck in a range, they aren't tradable. If some big news is about to come out, then stay out of it's way.

(click to enlarge)

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