AUDUSD still in uptrend

I bought AUDUSD early this morning. The reasons are obvious—the pair is in an uptrend and although I think it’s a bit top heavy, so far all longs have been good longs. As long as commodity prices keep rising, AUDUSD, being a commodity currency will probably do well. I do expect something more of a pullback than what we’ve seen to date but I don’t have an indication it’s going to happen today, especially with the stock market rallying.

On the hourly chart the pair is at the top of a channel. There’s no indication of which way it will go so I just lightened my first long somewhat. Notice that I have a second position. To understand this position you need to look at the five-minute chart which shows it closing about a minor resistance line. This allowed me to take the risk of adding a position but I used a tight stop. As is usual when I put on a second position, the position size is much smaller (in this case 1/10 the size of the original position).

Here’s the hourly chart:

© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.