EURAUD 2 trades +60 and +58

Saw that AUD was strong across many pairs in particular against EUR and GBP. Later in move EUR weakness came in. See the two top 8 lists.

Exited the two trades as shown for a total of 118 pips and a return of over 20% for the morning.

London open 19 February '15

I was not in front of the computer at all this morning so did not trade these set ups. This then is just another example of the London open test or break and test of the range.

Please see the range as per the red lines on the gbpaud and gbpnzd charts (their correlation works nicely) after London open (green line). Moves lower fail, clean AB move to break range, higher lows and agreement across pairs (see the euraud and eurnzd charts) which were above their 100lwma's and moving higher.

GBPAUD trade 200 pips

Price came down to W M2 where we exited the sell for 336 pips. This level was resistance from 3-10 Feb '15. It drifted there for hours showing positive divergence on both 4 and 1hr charts. Bought 1.9626 exited for +200.

GBPAUD trade 336 pips

Identified a support/resistance level going back years. Sold a shorter time frame lower high. Exit when W M2 held for some time for +336.

EURAUD trade 230 pips

Identified 1.4730-4800 as a resistance area. Sold a shorter time frame lower high 1.4770 exited at W M2, our over night take profit for 230 pips.

London open trades Friday

I didn't trade at all on Friday so this is just an example.

I have been asked what happens if a London open trade in one direction fails.

The 6 pairs we mainly watch (gbp and eur with aud, jpy and nzd) trend well. The number of days where there won't be movement and they range completely sideways are few in number. Part of the reason is, as mentioned, they simply do trend well. Part of the reason is we are filtering moves out where there is no agreement, there is no general strength/weakness.

In the screen shots below going into London open (green line) both gbpaud and euraud are moving up making higher lows. This suggests aud is weak and both eur and gbp are strong. To choose which pair to trade we would look at other gbp and eur pairs. Which currency has other pairs moving up? We feel this filter has the best chance of picking a pair that will give some movement.

Should the trade fail we are risking around 15 pips. Then we will be looking at price action. In this example we were be looking to buy. Should that fail for us to consider a sell we'd be looking at our trade rules for price to move cleanly below the moving average (clean AB move), to test the lower range or break and test the lower range, to have a small BC retrace and to have the agreement across pairs to confirm strength/weakness.

Thankfully when the rules are met failed moves in both directions after London open in pairs that have strength/weakness are few in number. When the move does occur the pairs give trades far bigger than the loss of any initial failed move.

 

London open trades

Just showing yet again to give an idea how often this sets up.

GBPAUD moves up from low of range to top of range around 1.9640 at London open (green line), see the red arrow up. GBPNZD and GBPJPY do the same suggesting GBP general strength. EURAUD has a similar move up suggesting AUD weakness as both GBPAUD and EURAUD moving up.

So I am happy that trading GBPAUD is good strength v weakness,

From here the next 1 min higher lows can be bought. The 1 min chart attached shows what might be my last trade for the day.