The fall in the Australian dollar today has been fairly telling. I mentioned that bounces seemed weak and every time it looked like we may be showing some resilience it soon got the chair pulled out from under it. That’s not a sign that a market wants to go up.
GDP missed by a point overnight and as a reader commented earlier, that’s not a reason for the large falls.
AUD/USD daily chart 04 12 2013
We can’t dispute the moves and the break of the support line is another sign that the pair is in trouble. If the sellers decide to push on 0.90 then I don’t see it standing up to much and another wave will kick in lower as longs from August lows cash in.
As I’m long every 100 pips from 0.9500 it would be very easy to try and talk my book and about why it should go up. That does my trading, and my commentary to you, no good whatsoever. It’s easy to sit here with a large loss on the books and see doom and gloom. You question your strategy and whether you got it totally wrong. I’m still solid on my strat but I know I’ve gone far too early on my timing.
I said my first real assessment point would be 0.9000 and that’s what I’m going to do. If I need to take a hit and let off some of my topside positions so be it. They are not of a size enough to do my account any real damage as I traded small to build up a decent position over 1000 pips lower if need be. If anything I’ll free up some margin for trading lower levels.
As with all strategies you must have all your ducks in a row before you get in so that you can ride out any events and movements. If the trade conforms to your strategy and cash management then you can sit through it until the final curtain. If it goes against you then you know your loss and have planned for that outcome anyway. That’s the difference between trading with a clear head and conscience or trading like a rabbit in the headlights.
