Dynamic Trader Forex Blog FXCPS.co.uk: Down, but not out !

Good Evening / Morning Dynamic Traders

"Better to have tried and failed, than not tried at all"

Cross = AUDUSD : Day chart below.

Hello everybody, I hope you all had a good break away from the screens for a couple of days and had a chance to reflect on last weeks results.

Last Wednesday I was stopped out of 6 positions on the day which tried hard to effect my psyche, however all was not lost. Some of those positions were multiple on crosses and a couple were winning single trades, either way I do not like giving back in one hand what I gained in the other. Added to this as a "Trend" trader I like my trades to continue for a longer time period.

Tonight I want to look at one of the crosses I lost on, and reflect on the eagerness to get into the trade early can bite you, when patience would reward you. I had been in both the AUD & NZD previously in their uptrend and was awaiting them to return to their uptrend after a recent deep pull-back.

I have indicated the trend and resistance on the above chart and you will see the trend in force from the beginning of 2009.

The following chart looks closer at where I entered the trade incorrectly and patience would have kept me out of the trade and the cross remaining on my watchlist. This would have prevented myself from having losers in two crosses as the NZD also performed similar.

Trying to be too eager resulted in my taking the RED resistance line as a signal to break, which would indicate a likely return to the uptrend. Entry provide a short term profit before price fell away and presented me a loss after being stopped out.

The correct line should have been the BLUE line, which had been used numerous times previous and price NEVER would have triggered the trade using my ESLT. Furthermore we are now at 50% retracement, a key Fib level, which could see price return to attack it's previous highs and its uptrend.

This cross remains on the watch list for confirmation and use of the ESLT on the BLUE line may trigger a further entry.

I do hope you learn from my mistake and remember to do your own analysis before entering any trade.

Trade with Passion

John Maher
Forex Analyst