With current crazy media coverage and emotion-based fundamental news regarding USD and CNY going crazy, it is obvious where short-term/day traders will head on to speculate in search for quick riches. And by just doing the opposite, searching for trending instead of liquid currencies, you’ll be in-the-money pretty effortlessly for some pretty while. 🙂
As an update to my previous technical analysis on August of the hot currencies (AUD, CNY & XAU), I present this mid-long term possible trade to carry for the next couple of months.
GBPAUD, WEEKLY CHART
You might be wondering why I trade exotics despite the lower liquidity and high spread. The truth be told, being an educated trend trader, it really does not matter if you enter a trade at the start of a trend or in the middle because as long as you are right, you win. And which in this case, it’ll be almost always since you’re going along well with your pig-headed friend (a.k.a. The Trend). Hence a little bad price execution and spread will most likely be nothing compared to the amount you’re going to take from the trillion-dollar market, isn’t it?
Back with the chart saved on last Sunday, the closing price hovered around the previous low of the up-trend where I drew a horizontal support line. Actually in fact, it has breached the level and formed a lower low as of last week. This clearly shows that bear is slowly gaining the upper hand and educated trend traders will guess that this is the start of a down-trend for months to come. Conservative ones will wait for this week’s closing before entering while a little riskier ones will enter around this time now.
Nonetheless, as drawn in the chart, there are two very very strong up-trend supports from the recent rally which the bear has to break before it is considered a ‘long-term bear’. And I doubt it will, which made me stated above that this will likely be a mid-long term opportunity.
In conclusion, this will most likely be a very good example of how trend traders trade a trend reversal. 😀
Stay curious, always learning!
The Independent Abecedarian
As always, all ideas should not be construed as an enticement to buy or sell the financial instruments mentioned, and that there is no guarantee of profit of sort.
P.S. To add on, We’ve hit 500,000 unique hits before Year 2015 could end! Yay! You guys are just too awesome! 😆 😀
What’s this again! We have hit 500,000 hits! Yay!
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The Independent Abecedarian
Posted by The Independent Abecedarian on Tuesday, October 13, 2015
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