Having looked at all the markets this morning, no real trade opportunities jumped out at me. However I ended up taking two trades just to kick things off, in hindsight this was probably not the best idea as it is rarely wise to force a trade. But in the interest of kicking off this account the two trades I took was as follows:
Trade 1: ALSI long @51816 with a stop-loss @51440 (Open)
In keeping with the 2% risk profile I took 0.3 contracts giving me a total risk of 376 x 0.3 = 112.8 (ZAR). Technical reason for taking the trade is the potential breakout of the symmetrical wedge visible on the Daily, with a positive close outside the wedge on the 4Hr. We are also in an uptrend being above the Ichimoku cloud both on the Daily as well as 4Hr. I am also seeing hidden bullish divergence on the 1Hr for both RSI and MFI. If the breakout confirms we will have a technical target at around 52850. This equates to a potential profit of 1034pts giving us a Risk:Reward of 1:2.75. Risks to the trade is that we have a Gap close of Daily @51734 with a potential Gap down tomorrow. Trade 2: Brent Cruse short @71.59 with a stop-loss @72.50 (Closed)
I saw a potential opportunity to short Brent Crude on the close of a very bearish 4Hr candle. Having clearly rejected the 100EMA on Daily and also a key 4Hr level, I decided to take a short trade hoping to catch a ride on the current downtrend expecting it to continue lower towards the 200MA on Daily (around 70), which also coincides with a major level of support. This would have given us a risk:reward of 1:1.75. Unfortunately almost immediately after entering the trade, price immediately rebounded back to the open of the 4Hr candle stopping us out. Although unfortunate we accept the loss and move on to the next trade. I will continue to keep an eye on Brent as I suspect the down trend is likely to continue. Loss with some slippage amounted to 2.38%.
Update on our active trades:
ALSI Long: After a fake breakout price retraced aggressively and we got stopped for a 1% loss @51610
EUR/USD long: We unfortunately got stopped for a 1.5% loss @1.1554 when price retraced to test support @1.15271. Funny enough it seems as though this was indeed just a retrace as price has since rebounded. I will reconsider a long position again if we can get a 4Hr close above the 200MA.
USD/CHF long: The position is still in profit and looking strong. I will look to move the stop loss to break even tomorrow if price has moved 50% to our profit level.
Trade 14: AUD/USD short @0.71753 with a stop-loss @0.71965 (Open)
After the breakout of the larger symmetrical triangle and the subsequent retest and rejection as highlighted on the 4Hr chart below I decided to enter a short position on making a new low.
I am actually risking 4% on this trade due to a change on the trading platform catching me off guard. This caused me to accidentally take double the exposure and consequently double the usual risk. Luckily the target is a proper 1000pips away @0.70751 giving me a very respectable R:R of 210:1000 or 1:4.7.
If this trade works out for us our account will be 12% into profit.
Update on our active trades:
GBP/USD short: This trade worked out exceptionally well with the take profit target @1.2940 being hit early this morning. Price actually continued to go down after our short target was hit all the way to support @1.2870.
ALSI long: The position is currently in profit but price is still consolidating and we would need to see a break to the upside if we want to see our target hit.
EUR/USD long: The position is currently out of profit by a small margin. Hopefully we will start seeing some price action tomorrow.
USD/CHF long: The position is currently in profit, but the bullish price action is much more subdued than what I expected. Let's see what tomorrow brings.
Trade 13: EUR/USD long @1.1625 with a stop-loss @1.15554 (Open)
After a decent run on the EUR/USD the last couple of days we have seen a corrective wave developing over the past three days. I have identified 1.1625 as a major level of support and had a long buy order waiting at this level. This level was recently triggered with price unfortunately not quite finding it's feet yet. The 4Hr 200MA should also act as support and I have therefore decided to place my stop loss slightly below it @1.1554 risking 1.5%. I have not defined a target but are hoping for a continuation of the bullish trend up to around major resistance @1.8000
Trade 12: USD/CHF long @0.9676 with a stop-loss @0.9625 (Open)
Having kept an eye on this pair for quite some time expecting buyers to step in at some point between 0.9648 and 0.9700 I have decided to finally take the trade as we had a strong hourly reversal of 0.9652.
The primary reason why I have been watching this level is because it is evident from the daily chart that this level is the point from where the last rally took of. This means that all buyers who missed out on the first rally would look to get involved again at this level.
My target is about 230pts further up @0.9907 with my stop loss 50pts away @0.9625. This effectively gives me a risk reward of 1:4.6 making the 1% risk to capital well worth it.
Trade 11: ALSI long @52075 with a stop-loss @51610 (Open)
As mentioned in my market analysis this morning I expected the ALSI to pull back to 52388 and then possibly further to 51938. As it turns out we did get the pullback to 51938 and on the first sign of the bounce I decided to take the long trade looking for trend continuation. I have decided to risk only 1% as our win rate has taken some shots lately. This trade is presenting us with very good risk to reward.
Update: With the GBP/USD still ranging our long trade hasn't really moved much, although having caught the initial reversal well we are still in profit.
Unfortunately our EUR/USD long trade was stopped out yesterday for a 1% loss after price pulled back rather aggressively. I will look to re-enter the trade if price can manage to break free of this corrective move.
Trade 11: GBP/USD short @130.36 with a stop-loss @130.85 (Open)
So after the extreme exuberance in the market yesterday, I noticed that the GBP/USD has managed to go all the way up to resistance without any retest of the breakout. For this reason I decided to set my alarm for 02h00 in the morning and opened a sneaky short right at the top where I determined resistance to be.
As you can see from the below screenshot I managed to catch the short perfectly at the top.my initial risk for the trade was 1% but I moved the stop loss to break even this morning making it a zero risk trade from here on.
My target is the retest level of the breakout @1.2940
Concerning our EURUSD long trade, we are currently seeing price consolidating just above diagonal resistance.
Note that I have decided to move my daily market analysis to a new topic over here:
I will thus only be posting new trades and trading updates in this thread going forward. This should keep things less cluttered.
Update on our three open trades:
We saw some crazy volatile price action the last couple of hours with our GBP/USD long trade hitting and then surpassing our target in a single candle. Unfortunately I wasn't in front of the charts to witness the price action and price ended up exceeding our target level by at least 100% meaning a lot of money was left on the table. This is were a trailing stop would have been very handy to keep us in the trade. Unfortunately the trading platform I am using to trade this portfolio doesn't appear to have the functionality.
At the other end of the spectrum we saw price action rapidly turning against our USD/JPY short trade and stopping us out at our stop loss level of 111.40. If we didn't have a stop loss in place the loss would have been twice as big by now. Risk on the trade was limited to only 1% so the pain was minimal.
Our EUR/USD long trade has fortunately also been benefiting from the recent price action and is once again in profit.
Update: So after the overall change in market direction we had another casualty last night. Our GBP/JPY long trade got stopped out at break even (142.88). And then to add injury to insult immediately reversed again:
Our USD/JPY short trade found some support shortly after we opened the position and went along to retest the 4Hr 200MA. So far it would appear that the 200MA is proving strong resistance, however a close above it could mean we will be stopped out.
Our EUR/USD long trade is still in profit after a mean reversal, but we still have both horizontal and diagonal support at the break even point. I have tightened the stop loss to 1.1614 meaning risk is only 1%
Our GBP/USD long trade is not looking too great with price breaking below the channel last night. Currently price is back at the bottom of the channel re-testing the breakout. If this retest succeeds and we see price staying below the channel, it might be an indication of some bearish continuation.
ALSI: We still haven't closed the gap from 30 January and I suspect this will be the final push towards the 54100 target level. After this I still think a healthy pullback to 5388 is plausible, but we will need price action to confirm the reversal if looking to catch the swing.
DOW: Starting to struggle making new highs with price starting to consolidate. It is possible that we might have a temporary top in place if we break below 26060, on the other hand a close above the previous swing high @26140 will be bullish. If we see a break to the downside we could see 25880 retested.
DAX: So far staying above the 4Hr 200MA with price consolidating. If we break above 12550 i think the 12700 level would be in reach.
FTSE: Currently hitting some resistance at the 4Hr 200MA and will likely pull back to 7620. If we can hold this level 7680 could be next.
Brent Crude: price tarded lower overnight with kijun-sen @ 75.88 being tested. If we hold above kijun-sen 78.15 is still in the sight. If we close below it however, we will likely see 75.50 retested.
USD/ZAR: It appears my fundamental view was correct and wee saw price re-test 14.40 as mentioned yesterday. This level is currently acting as resistance and a retest of 14.25 is possible. Overall my fundamental view remains bullish and 14.70 would not be an unlikely target.
AUD/USD: Resistance at the 4Hr 200MA proved too strong and we saw price reverting back into the symmetrical triangle. At this point we could see either 0.7293 or 0.7256 retested. If we can eventually get a close above the 4Hr 200MA, the bullish run up to 0.7440 would be on.
EUR/JPY: Currently retesting the breakout @129.70, if we can hold this level the march to 131 is back on the radar. If we lose support here, we will be re-testingh the 4Hr 200MA @129.
USD/CAD: As expected we saw price test the 1.2920 support level. As mentioned yesterday if we manage to bounce we could see 1.3037 re-tested. If support fails we will see 1.2825 tested which coincides with the Daily 200MA.
EUR/CHF: Turns out my rising wedge hypothesis was correct and price started breaking down towards support @1.1407. At this stage a retest of the wedge breakout @1.1420 is very likely. If the retest succeeds and we head lower support levels are 1.1385 and then 1.1355
USD/CHF: As expected we saw the Daily 200MA acting as support and providing a little bounce. I am not convinced however that this bounce will last and a close below the Daily 200MA would see price trading lower towards 0.9700 and 0.9650. I am still looking to get involved at these levels possibly scaling into a long position.
Update: So just as all our trades are moving along just lovely, Mr. market comes and messes everything up. Look at how close our GBP/USD trade came to it's take profit level (the red dashed line) before we suddenly started selling off... unfortunately the sudden turn in global markets is affecting all our open trades. Hopefully things settle back down soon.
Trade 10: USD/JPY long @111.05 with a stop-loss @111.40 (Open)
Based on the 4Hr tweezer top reversal and rejection of the 200MA, I have decided to re-enter our USD/JPY trade. Stop loss is just above the 4Hr 200MA and our target @110.60 which should act as a major level of resistance.
Since this is our second attempt at this trade I am only risking 1% (and effectively only 0.4% if we take into account we banked 0.6% on our first attempt). Risk:Reward equals 38:42 or 1:1.1
Midday Market Update:
ALSI: Bulls are still running strong and are now almost at the 54100 target level. I believe a