AUD/NZD - Update

AUD/NZD - Update

In response to a number of queries, below is a daily chart of the AUD/NZD. Having highlighted a buy, the market has continued to sell off.

Source: Iress

My initial call was based on a Bollinger Band reading, picked up in the scans run each morning. When I get a currency or security turning up on multiple scans I tend to highlight it, and this was the case with the NZD. As you can see from a chart of the AUD/NZD, the NZD has continued to strengthen, running down the band and slicing through support levels at 1.32 and 1.3080. Its possible the market is re-rating this pair on the outlook for higher NZ interest rates.

Clearly, I’ve now been stopped out on my two initial trades. I’m still getting oversold readings on this pair, but am now waiting for a trade trigger, such as an RSI divergence or a reversal at a Fibonacci or other support, before re-visting this one.

This illustrates two important aspects of trading:

1) Nobody, least of all me, knows the future. I don't claim to have a 100% accuracy in my trade selections, and have never met an honest trader who does.

2) Stop losses and trading discipline are keys to successful trading.

Having said that, its still a humbling experience to be so completely wrong on a call.