This morning’s forex trade was based on the AUDCAD, a pair I don’t normally trade but as readers may know I’ve recently been road testing some indicators and this was the pair which was highlighted at 8.30 am. Long trade entered on 5 min chart at 1.0138 before exiting at 1.0155 for 17 pips. Since exit, indicators have signalled a short on 5 min but actually waiting on the 15 min to see if move down is validated.
This morning’s trade was also useful for a number of other reasons. First as forex traders we can become too focused on the majors which can often lead to frustration and a lot of what I like to call “forced” trades. Now, I appreciate there is more liquidity in these pairs but sometimes we just have to move away and broaden our horizons and, I have to be honest and say, it made a refreshing change from the dreary tedium of the euro woes. Second, as forex traders we need to remember the forex market is a speculative market with no one really knowing why currencies are being bought and sold and, as such, currencies will move around for a multitude of reasons. For example, a large exporter such as Honda may decide to hedge before shipping its products overseas and which may affect particular pairs in the short term. Whilst no doubt interesting all we want to do is profit from a currency’s strength or weakness.