This Week’s Swing Trading Review; 11th February 2012

This Week’s Swing Trading Review; 11th February 2012

The 2 main Swing Trades I chose to run over the last Week turned out to be the most Volatile FX pairs around! The GBP:CHF long didn’t play out as expected with huge swings in both directions. Ultimately this was stopped out for a 91 pip loss but incredibly annoying that it was stopped out 1 pip LOWER than the day’s official low, most probably through spread skewing by my broker. From there it rallied into what would have been a profit. Situations like this can be disheartening but there isn’t a lot we can do about it and changing brokers is usually a pointless exercise.

The GBP:CAD short goes into the Weekend showing a tiny loss but again this was an incredibly volatile pair with huge intraday swings in both directions and although the stop loss hasn’t yet been threatened, this kind of chop can be a sign of rotation so I’m watching closely for indicators to turn so I can quickly abandon the trade if there are any doubts.

I opened a GBP:USD long as a short term swing from support and would like to see 50-60 pips profit after which I will re-evaluate whether the trade is worth running longer term.

With regards to the stock Indices, Friday saw weakness across the board but it’s fair to say that no real technical damage has been done. A daily close below Friday’s low will have me being much more cautious on the bullish side and a DOW daily close below 12,570 area would have me actively seeking risk-off trades across both Indices and FX pairs.

Going forward I think Yen Pairs remain most interesting in particular AUD:JPY which I’ve been tracking closely on this blog. I’ll probably look for signs to buy the current AUD:JPY pull back (watching for a re-test of the triangle break-out, and if that were to fail I’d then switch to looking to sell CAD:JPY which to me continues to show a long term more bearish picture. The rallies against the Yen have been rather speculative based on some recent Japanese data but more so on the speculation that BOJ is preparing to intervene in weakening it’s currency. If the rallies against the Yen continue as they have done, USD:JPY above 77.70 and above the daily 200 MA (currently 77.52) will have me interested in the long side.

I’ll try to get some more analysis posted up Sunday night or Monday.

Have a great Weekend.

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3 Comments
  • Razor Swing Trader
    Posted at 01:15h, 13 February

    What does a risk off trade mean?

  • RS2OOO
    Posted at 19:53h, 13 February

    Hi mate.

    My interpretation, which could probably be improved:

    You’ve probably noticed how there are so many correlations in the market, for example when stocks are going up, Euro is also going up, but the U.S Dollar is going down. (Euro not so much lately due to Euro Crisis).

    Risk-on is when riskier assets such as stocks and Euro are rising.

    Risk-off is when safer assets such as the U.S Dollar is rising.

    Risk-on = Riskier markets with generally higher returns but greater risk of losing those returns suddenly.

    Risk-off = Safer markets offering low returns but very little chance of the investment turning sour.

  • Razor Swing Trader
    Posted at 05:23h, 14 February

    Thanks