Breaking The Cycle
April's off to a good start. While volatility did make it difficult to establish a directional bias on most pairs, I took my time and spotted a few structural plays to swing my account back.
Surprisingly, I did manage to exit this trade at the lowest point. I didn't care too much about riding it out since this trade occurred near the end-of-week close. I wasn't about to hold it through the weekend anyways.
The daily price action on this pair was pretty much the inverse of the NZDUSD play. However, this wasn't the case for the intraday.
This does lead to my next objective - stopping this cycle where my equity curves go through periods of up and down swings.
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| EdgeWonk Performance Graph |
Now for the trade review. I first spotted a daily breakout over on NZDUSD. As I was watching it live, this pair was just about to breach below the 0.68880 support level.
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| NZDUSD 1-Day |
Surprisingly, I did manage to exit this trade at the lowest point. I didn't care too much about riding it out since this trade occurred near the end-of-week close. I wasn't about to hold it through the weekend anyways.
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| NZDUSD 1-Hour |
I placed a similar trade on the NZDCHF pair. Unlike with the previous trade, there wasn't a clean daily signal here. However, I was able to identify and capitalize on the intraday momentum.
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| NZDCHF 1-Hour |
Price made a double-top and then broke below the 0.64485 level. While momentum stalled, it did quickly pick up. After price traded up and retested the breakout level, I plotted a lower minor level at 0.64315. This was a decision level to justify my entry should price breach below it. Since price did, I entered short as it accelerated to the downside.
The significant trade also involved a bit of luck as my exit timing really worked in my favor. Over on USDCAD, price breached above the 1.254 level so I went in viewing this pair with an upside directional bias.
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| USDCAD 1-Day |
The daily price action on this pair was pretty much the inverse of the NZDUSD play. However, this wasn't the case for the intraday.
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| USDCAD 1-Hour |
After seeing the daily structure, I decided to trade this breakout continuation. I was incredibly lucky that I decided to scrap this trade. It was more so done when I simultaneously closed on the NZDUSD and NZDCHF trades.
In hindsight, I, as a contrarian, should not have entered long into a rally like this. Once again, I got lucky. I continued to monitor this pair and entered short when price traded back below the breakout level.
This is one of my signals - the false breakout or fakeout. This occurs when price breaks above a level and fails to sustain the move. As price tanks and sharply trades back below the level, I would enter short to bet on the reversal.
Given that the dollar index is topping out, I decided to hold this trade through the weekend. Knowing my broker's shenanigans, I prepared for rollover by widening my stop loss by 3x.
This wasn't the only trade I decided to hold through the weekend. I took a trade on WTI as well since I noticed the price drift and stall over on the daily level.
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| WTI 1-Day |
Price didn't make a perfect touch at the daily support. However, the intraday price action did indicate downside momentum was dying off. Here's the hourly timeframe.
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| WTI 1-Hour |
After a downtrend, price lost momentum and began to trade in this range. And so, I preemptively entered long. Since I highly doubt price will resume its downtrend over the following week, I widened my stop in order to hold this trade through the weekend.
I plotted another minor level at 97.43. If price breaches above this level, which also serves as the upper range boundary, this would be a good indication that upside momentum is picking up.
In the weeks ahead, I will be managing the WTI and USDCAD trades. It also means that I will have to be very stringent with how I filter out signals in order to trade the structural moves.