The bullish tone for the Aussie dollar continued overnight and into this morning’s London trading session, with the daily chart of the June futures contract moving firmly higher once again and preparing to test the very strong level of resistance at the 0.9400 level. This current move higher was initially signalled by the isolated pivot low of early June, and since then the pair has seen seven days of consistent gains, with the 0.9200 region providing the requisite platform of support for this move higher.
For the Aussie dollar to progress the 0.9400 resistance area is key following the failures in April and early May, and provided we see a clean break and hold above this level there is no reason why the pair should not continue higher and on to test the 0.9617 area of October 2013. The volumes associated with the current move remain average or above, but for any sustained breakout we do need to see these volumes also rising in tandem with the pair. The daily chart of the currency strength indicator to the left is suggesting that the Aussie dollar has some way to go before reaching an overbought status in this time frame.
By Anna Coulling
After developing an EA on metatrader and feeling like I was in a casino, not a financial industry, I decided to read your books. I’ve learnt a lot from you and would like to thank you for this.
I took the plunge on this trade (and EURUSD) and have closed out profitably on both. More importantly though, I feel I have a much deeper understanding of what the markets are doing now.
The only thing I would like to know is how to restrain yourself from closing out on a profitable trade too early. Sure, I understand the technicalities, but it’s the psychology of dealing with a trade that I would like to master.
Hi Jeremy – many thanks for your kind comments which are much appreciated and I am just delighted that you have found both the books and my site helpful in your trading. It really does give me the greatest pleasure to hear from other traders such as yourself, and I am humbled by the responses that I have had, so thank you once again. With regard to your question, this is one of the hardest things to master in trading, and to be honest, is probably the hardest of all. The reason is very simple. Getting in is the easy part, but staying in through all the reversals and pullbacks as any trend builds is immensely difficult as here you are dealing with the emotions of trading – the emotion of seeing a potential profit dwindle away, and perhaps turn negative in the short term. Many people suggest targets or risk/rewards ratios – none of these work in my humble opinion. Every decision has to be discretionary and this is where VPA comes to help once again – after all if you can use it to get in, then it will also reveal when a move is becoming weak, or even reversing. Using multiple timeframes is another key approach to understanding whether you are trading with the dominant trend, or against it, and also whether the trend is slowing in the faster timeframe, which in turn may then ripple through to the medium and slower timeframes. VPA also helps in another way in this respect, forcing the brain into an analytical mode, and away from the ‘fear – fight or flight’ mode. My fellow trader Rich Friesen ( ex pit trader) has developed a great course to help traders deal with the emotional side of trading, and if you would like further details simply click the link here, or visit the page on the site here about the psychology of trading. Once again many thanks for your very kind comments and if I can help further please just drop me a line. All best wishes – kind regards Anna