Day Trade The Australian Dollar

9-27-2013

by Marco Hering

In order to Day Trade the Australian Dollar you must not only be proficient in Forex, you must also know your Gold and Commodity markets. I explain this along with BT in our Live Training Room. I want to go over some ideas today that I had today.

Since the EUR/USD hit my buy area that we discussed in the Training Room, I went long EUR/USD. I also went short GBP/USD and long GBP/AUD. To get the two uneventful trades out of the way: EUR/USD got stopped out for -30 pips and GBP/USD was closed for a +14 pips profit. GBP/AUD had the most potential, and I decided to hold the trade into today's European session. The trade did work out quite well, and we got out in the live trading room this morning for a 98 pips profit .This was a nice five wave move as you can see in the chart below. In hindsight it would have been better to hold the trade for longer but I wanted a clean sheet for today's trades and a combined +82 pips profit on yesterdays trades is not too bad. The setup in the GBP/AUD was based on the EMA-break and re-test strategy. I explained this strategy in a video about the EUR/USD a couple of days ago. GBP/AUD broke the moving average cluster and re-tested the EMAs from above. I saw a nice bounce off the hourly 100 EMA and went long at 1.7111 with an initial stop at 1.7063. The pair moved a bit in my direction and I moved the stop to 1.7080 with no target. GBP/AUD hit even the 161.8% Fibonacci expansion at 1.7298 in the end. Congratulation to the members in the live trading room who hold for longer.

Another reason why I liked to short the Australien Dollar against the Pound was the weakness of the AUD/USD compared to the GBP/USD. The AUD/USD made a re-test of the former trend line. You often see these re-tests as potential turnaround points again. For this reason I like to keep trend lines for longer in my chart even if they got taken out. We also still have an open gap to fill in the AUD/USD . If the gap gets closed and the pair pulls back to the 200 EMA in the 4H chart I will look for long again if I see some buying interest around my buy zone.

Meanwhile EUR/AUD could see a turnaround to the upside. I was looking for a break and re-test of the EMAs for a couple of days and it looks like I could get a long setup here soon.

In order to Day Trade the Australian Dollar effectively I suggest always keeping an eye on Gold. A stronger Gold price will normally push the Australian Dollar in the same direction. If you are looking to learn how to Day Trade The Australian Dollar give us a try in our Training Room. Be sure to join me on twitter.com/livedaytrading and Facebook.com