Well it's been quite an interesting week this week because I've been employing a few strategies that I wouldn't normally consider using. Furthermore these additional positions generated more profits than my main 4 hour trading strategy, and they were based on nothing more than sound logic and gut instinct.
I did still trade my main 4 hour trading strategy but it's struggled to generate any profits because they were both on the GBP/USD and unfortunately this pair just didn't want to go down. The EMAs crossed downwards on two occasions on the 4 hour chart but I was forced to close both of them out for a loss, and ended up around 83 points down in total.
Nevertheless I still made some decent returns trading this pair, and indeed the AUD/NZD pair. I've talked about both of these pairs, and how they are starting to look weak, in my two latest blog posts and have therefore been watching them both very closely this week.
I took a short position on the GBP/USD back on Tuesday (before the first downward EMA crossover when I then opened a new position). The Supertrend had recently turned red, ie bearish, on the daily chart so when the price then rallied a few hundred points after some positive economic data, I was confident that the downside would prevail in the end.
I opened a short position at 1.6550 and was targeting a fall back to 1.6400 (with a stop loss set at 1.6600). I ended up watching the football and left the position to run overnight. Thankfully the price did fall to 1.6400 the next day for a very nice 150 point profit but I was actually very lucky because I was within 6 points of being stopped out at one point.
I could have shorted this pair again at the same price but the fact that it bounced back to where it was so quickly put me off because I thought we might have seen an upwards breakout. This hasn't happened and so I think the downside will eventually prevail next week but this sideways action has certainly been frustrating, even though I managed to come out ahead.
The other pair I traded was the AUD/NZD pair. You may recall that I wrote a blog post recently highlighting the downward breakout. As a result of this I was waiting for a slight pull-back so I could open a low risk short position.
As it turned out I ended up taking two separate short positions - at 1.2311 and 1.2319. I was targeting 1.2200 on both occasions (with a stop loss set at 1.2400). The first time it didn't quite reach my target and I was stopped out at break-even (which still cost me about 15 points because of the large spread) but the second position came good after it hit 1.2200 a short while ago.
So it feels good to generate some profits using a different strategy but hopefully my 4 hour trading strategy will return to form once the major pairs stop trading sideways.
(By the way there was a nice upwards EMA crossover on the EUR/USD pair that would have resulted in some decent profits but I was put off trading this at the time because the crucial crossover bar/candle was around 170 points long).
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