AUDNZD - looks like another opportunity might come

There was an opportunity to go long in this pair on 27/28 Jan. But even though price went this low for the first time since Dec 2005, I was still not sure. The price action signal was also there, yet there was hesitation in my mind. See daily chart below.

Price did go up about 300 pips, but since then has given back most of these gains. It is likely that another chance will come perhaps this coming week to go long. It would not surprise me if the turnaround takes place at a slightly higher point. This time I plan to be decisive and take action on any confirming price action signal.  

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Comment by Daologic on March 1, 2014 at 4:47am

I will enter into this next week too. Let's see how it plays. Anyway this is a long term trade, mabe for a few months -1 year!

Comment by talisman on March 1, 2014 at 5:37am

it is always difficult to act decisively when one does not know with certainty an outcome.  this is one of the greatest barriers to consistant success.  good luck.  for what its worth by my definition of trend this is a market to short. i would wait for a pullback then enter short on the first bar that closes within 25 percent of its low on that bar.  although often considered a late entry by many it is an entry style that keeps you out of many marginal trades. 

Comment by Oasis on March 1, 2014 at 2:22pm

Thanks Talisman, you are correct as the downtrend is intact. Even though trying to pick a bottom is a dangerous game, here are some thoughts on why I am considering doing that:

1) Value - It looks like a good price to sell the NZD and buy AUD. I am using 1.05422 as my guide to this value area with ultimate low I can see at 1.04540.

2) The recent (24 Jan) low was 1,04904 and i would expect buyers waiting there as the entire orders could not have been filled at that time.

3) I also think that we may not reach as low as 1.04904 and the turnaround should start a bit higher. If on the other hand price does reach that level or goes below it, my confidence in taking this trade would be greatly reduced.

4) Upon seeing an appropriate  price action signal (H4 or D) I would take a trade. As Sam Seiden says if you wait for confirmation etc. you are also increasing the size of your stop loss.

5) If all this thinking is correct, then it would be reasonable to expect price to move up fairly quickly. In that case taking a trade early will also mean moving the stop to b/e sooner.

If this trade is good then R/R would be awesome. If it is not, then it would be yet another loss.

As always I enjoyed your sensible and stable look at the market and hope you are having a good weekend.  

Comment by Pip Logic on March 2, 2014 at 9:57am

Comment by Pip Logic on March 2, 2014 at 10:04am

I would buy 1 unit at the market and if my pending buys don't get filled I buy more

Comment by Glider on March 2, 2014 at 3:27pm

Hi Oasis I would definately take this for a 100 pip bounce up in fact this is my plan for the new week 1.0750

Comment by Oasis on March 3, 2014 at 1:18pm

I think the bias is still to the downside. Several hours of bullish move is being taken out quickly by the bears. See hourly chart below:

Comment by Pip Logic on March 4, 2014 at 10:27am

Comment by Pip Logic on March 4, 2014 at 10:30am

4 hour

Comment by Pip Logic on March 4, 2014 at 1:40pm

Comment

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