This week began with a review of Jarratt Davis’ weekly Risk Events video. I’m watching the news events and the corresponding market action as much as possible, and getting a feel for price action following an event. Knowing the schedule in advance, in my time zone, is absolutely necessary.
I like the concept of watching the market flow, and then riding the waves. For years I tried to identify signals based on confluence of several technical indicators, and never felt as in-tune with the markets as I do right now. Last night I scalped the Aussie.
At 7:30pm my local time, the RBA released the minutes of their most recent policy meeting, where they held Interest Rates at 2.0% on July 7. I waited for the information to come out, looking for any surprises. The information was in-line with Fundamentals and Sentiment, and so I made Entry Orders to sell (2) lots at 0.7368. My mental stop was 0.7400, and physical take-profit at 0.7352, just above major support at 0.7350. The risk-reward may seem a bit off, to risk 32 pips per trade just to make 16 pips per trade, but I wasn’t looking for huge gains below the major low, and my stop was high enough to prevent getting whipped out.
Market Sentiment
Market is expecting no new details, and possibly some dovish hints from RBA
Market Fundamentals
- Low commodity prices (metals, iron ore)
- Slowdown in China
- Other commodity currencies are cutting interest rates (CAD, NZD)
Trading Plan: if announcements are in-line with bearish bias on AUD, sell AUDUSD for small gain. Expect to hold position very short term.
Result: RBA minutes confirmed that their current policy is appropriate, and would be data dependent. Also that Q2 production would likely be slower than Q1, and that a weaker AUD is necessary for economic growth. I watched the action for a few minutes, waited for any spiking up, didn’t see it, and set my entry orders. They both filled, and both hit my targets about 2 hours later.
Comments: I’m happy about being in the moment with this trade. I had Sentiment in-line with Fundamentals, and monitored the important Technical levels to keep from getting greedy. The Double Lot strategy wasn’t really necessary here.
Turning $100 into $1000 