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Apr 26

Let’s do Analysis together on AUDNZD….

After doing a lots of self-study, I hope you have now some idea regarding FOREX. If someone’s answer is still ‘NO’, I would like to encourage you to learn how to do analysis in currency pairs.

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Let’s do one analysis together….

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I am presenting my style of analysis. I would like to request all of you to share your own style in the comment box.

I personally always like to take my trades based on price action with the confluence of Fibonacci. Usually, I don’t like to use any kind of indicators, but sometimes I consult with MA or MACD or Bollinger Bands to find some confluences.

First, I always try to find some good support and resistance zone from past history. After that, I draw Fibonacci level to see whether that support or resistance zone match with any Fib level or not. If yes then I wait for price action signal near that zone and take my position according to my money management.

I would like to emphasize that money management and strong discipline is the only tools which can make you a successful trader. If I give same analysis to 10 persons, among them only 2 or 3 will be able to do profit with that analysis. Though, it sounds very amazing but this is the fact. Experience traders do not rely heavily on analysis or indicators rather they try to manage their portfolio with their strong money management. The main target is to minimize the loss and maximize the profit.

FOREX market has its own pulse, it does not move in same pace every time. Sometimes, it moves strongly in one direction with good technical moves and some times it becomes unpredictable or it enters in range market. Every trader will get their opportunity to make money if he/she keep patience during his/her unfavorable time and wait for his suitable time.

I want to give you a live example of analysis. The following chart of AUDNZD pair is the latest daily chart.

AUDNZD2

  • Firstly, I was looking for a price action buy signal in blue zone.Why in this blue zone? Cause this blue zone is a good support zone.
  • You can see that in last Thursday price touched the blue zone and moved back up in days closing. Therefore, it created a pin bar in our expected zone. In next day, price gave some retracement. So, now it is in a good position for long.
  • In the attached chart, you can see that if your stop loss is around red zone and your 1st, 2nd and 3rd profit zone is the green boxes respectively, you can easily target for 1:1, 1:2 or 1:3 risk-reward ration. Therefore, the R/R ration of this trade setup is good.
  • This place is also suitable for me to manage my trade with my own money management. Why this point is important? Cause you never know where the market will move in future. You need to be prepared to handle any kind of worst scenario. If you think that you can handle the worst situation for the trade setup then you can take your trade. Otherwise, it is wise to stay in sideline to find any better opportunity within your money management.

What is your opinion about AUDNZD trade setup? You can also post some fundamental news regarding this pair in the comment section of this post. I am expecting some insights and comments from you.

PLEASE TRY TO PARTICIPATE IN THE DISCUSSION BY GIVING ANY KIND OF COMMENTS OR FEEDBACK. 

1 comment

  1. Chief Trader

    Based on weekly chart, this will be a countertrend trade. Current RBNZ’s interest rate is 3.0% compared to RBA’s 2.5%. Central bank interest rate differential is expected to widen in NZD’s favor over coming months. RBNZ continue to maintain a hawkish tone while RBA remains neutral. However, most of these things have been factored in the price of AUDNZD.
    Since May is historically a bad month for NZD, and a double bottom appears to be in place, there may be a case for a long AUDNZD trade. 1.0680-1.0700 (61.8% Fibo retrenchment of the current long run) seems to be a textbook entry point with a stop below 1.05 (on a daily close basis) while the profit target is 1.09. Fundamentally, its difficult to see this pair showing any significant bullish momentum over next few months.
    http://bdfxgroup.org/wp-content/uploads/2014/04/AUDNZD-2014-27-04.png

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