Saturday, July 9, 2016

Week in Review: 4 June to 10 July 2016

The market has calmed after the 'Brexit' referendum, and now I'm back to trading normally again. 

This week has actually been pretty busy. I closed five trades, with three winners, one loser and one breakeven.


This was my "big" Brexit trade that I opened the previous week. 

Shorting the GBP was an easy decision. But short it against what? I flicked through my charts and decided that the GBPNZD provided the best trade. It offered a good setup AND offered the best overnight swap rate. Since I knew the trade could take weeks or even months, I felt the GBPNZD was ideal. 

My short hit its profit target at 1.80000 a few days ago. My reward was 0.5R. I could've aimed for more, but 1.80000 is a significant support level, and a 0.5R reward is profitable, according to my backtests, so I got out here. However, if 1.80000 breaks and I see another bearish setup, I'll happily go short again.


I opened this trade the previous week, after spotting a pinbar in line with the bullish trend. This trade worked out perfectly, and I hit my profit target on Monday, banking 1R reward.


I identified a pinbar setup and felt there was room for the USDCHF to fall. However, the market moved against me right after my entry, and hit my stop loss on the same day. Looking back, trading in FAVOUR of any European currency (EUR, GBP, CHF) was probably foolish, in the context of Brexit.


After losing on the USDCHF, I identified a bearish engulfing candle on the EURUSD, and went short. This was three days before the release of NFP, and I was hoping to hit my profit target before then.

Alas, by the time of NFP's release, my trade was still open. I decided to exit at breakeven and avoid NFP. My reward was only 0.75R, and since major news are unpredictable, I thought it best to sit out.


I also shorted the EURAUD, after spotting a continuation pattern. It looked like the EURAUD wanted to break down further, so I aimed for a reward of 0.75R, just above the support level at 1.45000. Price came agonisingly close to my profit target on Friday night after NFP, but then stopped falling. At that point, I felt it was better to take profit at 0.6R, as the markets were closing for the weekend.


It feels good to be back at trading.

GBP should continue sliding, although I think some news traders who went short will begin to take profit (as I've done). Alot of GBP pairs are hitting long-term levels of support / resistance now, but once these levels break (and I think they will), the GBP should freefall. I don't see much political leadership in the UK at the moment, with David Cameron resigning and Brexit leaders Nigel Farage and Boris Johnson walking away from the mess they created. 

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