I only opened two trades this week, one winner and one breakeven. The winning trade was quite funky, as I'll explain below.
I spotted a two-candle reversal pattern, in line with the downward trend, and went short at the break of the pattern. I initially aimed for a reward of 0.75R, which is below 1R. However, I spotted a potential support level near 1R, and felt safer taking profit at 0.75R.
Price did reach 0.75R... sort of. A major news release on Friday caused the AUDNZD to fall, but it also widened the spread considerably, up to 15 pips. The chart shows the bid price, but you need to add the spread to show the ask price (for a short trade, the ask price is what's used to exit the trade as you're now "buying" from the market to close the short).
Unfortunately the ask price failed to hit my profit target by a few pips, and reversed back up. With the market closing in a few hours, I decided to exit with a profit of 0.5R.
It was a pretty funky trade, winning but not quite winning.
Last week's Friday candle was bearish engulfing, so I felt confident going short on Monday. The major news event for this week was the Bank of England's monetary statement. This was coming out on Thursday, giving me over three days for the trade to act out.
Unfortunately, the trade went nowhere. A few hours before the BOE's news release, I decided to get out at breakeven and sit on the sidelines.
The BOE statement was neutral, although the GBPUSD rose a bit. I didn't see anything bullish from the BOE, and thought the GBPUSD's rise was unwarranted, and re-opened my short at a better price.
At this moment, the trade is still open. An image of the original breakeven trade is below.
I noticed that NZD crosses tend to have the biggest spreads. It should be taken into consideration when opening a trade, perhaps closing trades before news or the weekend. If you look at the AUDNZD chart on top, you can see that the spread's widened to 17 pips just before the close.