Day trade
Trade view / 08 June 2016 at 23:48 GMT

UPDATE: Kiwi is ripe, don't give it a squeeze

FX Trade Strategist /
Instrument: NZDUSD
Price target:
Market price:

This was not my finest hour. The original Trade Idea expected the long term NZDUSD downtrend to prevail, despite NZDUSD rallying after the terrible nonfarm payrolls report.

The trade idea also anticipated that Janet Yellen's speech on Monday would have been on the hawkish side, in support of the prior Fed speakers.  It also expected that the RBNZ would take advantage of a likely delay in a US rate hike to cut the OCR rate. 

It wasn't a totally off-the wall expectation as the odds for a rate cut were around 35%.

So what went wrong? Pretty much everything. To start with it was a counter-trend idea.  The intraday uptrend, in hindsight, was warning of an uptrend.

Then it gets worse. Janet Yellen was Janet Yellen and delivered remarks closer to dovish than even neutral. That result turned the trade into a rate cut bet which at best had only a 35% chance of success. That kind of trade needs some supporting technicals and in this case, there weren't any.

And the most foolish thing of all was changing the stop loss to 0.7072. All that accomplished was to increase the loss by 0.0032 points. I should have known better. NZDUSD trades in a rather thin market at 2100 GMT when the rate announcement is made. If 0.7040 was going to deal, so was 0.7072

This idea went belly-up pretty quick and resulted in a loss of 0.0115 points.

Note: the second sell order was filled.

Original trade idea parameters

Sell ½ position of NZDUSD at market (Currently 0.6935) Balance at 0.6985

Stop: 0.7040

Target: 0.6780

Time horizon:
Five days

— Edited by Adam Courtenay

For more on forex click here             

Non-independent investment research disclaimer applies. Read more
vsquare007 vsquare007
Do you reckon to hold on to losses and wait for some recovery over next few weeks instead of closing it for loss ?
Michael O'Neill Michael O'Neill
No. The stop loss is triggered. The trade is done.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail