Tuesday AM AUDUSD 15 min chart

Let’s begin by looking again at AUDUSD

AUDUSD dropped out of its upward channel overnight. It came within 1 pip of hitting one of my profit stops (I have two long positions open, both profit stopped).

The doji evening star I identified late yesterday seems to have had a little impact but the pair isn’t giving up yet. It will most likely climb back to the channel (around .9299 now). There, the bulls and bears will have to battle it out again. It needs to break .9300 in order to continue its rise. If it can’t do so, then it may be time to lighten longs more than I’ve already done so.

On the positive side, it never fell into oversold. It also never reached support of .9225 before it turned again. This is why I won’t close my longs completely. One just doesn’t know. Beside which, there’s time enough for a short if it falls some more. Here’s the 15-minute chart this morning:

© 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.