Thinking to trade AUDUSD

I haven’t made a bet this year mostly because of a personal reason (starting out with a new job in a new city). I need to see what trading cycle I am most confortable with the new life.

As the end of Q1 is approaching, I started to feel that I wanted to trade at least once. I only looked EURUSD and AUDUSD, and I decided to take on AUDUSD this time.

The first chart is from the previous post in December last year:

I don’t think Wave IV has ended yet, and here is the daily chart from today. If IV is composed with A-B-C flat wave, what should be coming is downward C. So I would play short for the coming months.

But in March, I’d rather trade long at C of .2 as in the 360min chart:

Year-end report: 3.1% gain

This year, I am thankful that I finished with a +3.09% capital gain. It is much smaller than 2009 and 2010, and I only traded 10 times in a year. By now, I know very well about my trading style and cycle. I don’t day-trade. I don’t hold too long to the carry-trade. I only take the position when I anticipate to book the profit (or at least know where the result is heading) within a week or so. This year’s market overall especially in the major cross-currencies (*) was not giving me much opportunities. But it’s OK to me because I am not a full-time trader, and I am not convinced to change my style until the risk for such change, including the effect to my personal life style, can be measured somehow. But again, I did not lose money by rushing to take position. That is what matters a lot.

Looking at weekly chart of EURUSD, I decided to anticipate EURUSD to go as low as 1.2450 after updating the Elliott Wave labels as in this chart:

Another currency pair I like to trade is AUDUSD but this year was dreadful side way move. But I remain mid-term bullish towards 1.135. The reason I used 1.382 Fibonacci of the amount of 2008 crash is that I am assuming the rally since 2008 bottom is Wave b of a expanded flat wave. That means after marking 1.135 or so, AUDUSD will crash..even lower than 2008 bottom. That sounds crazy. I know it and I am just saying this is one possibility. The other scenario I wrote sometime this year is that the AUDUSD had a real bottom in 2008, and it just rallies towards 2.00 or more from here. That sounds equally crazy. So, I don’t really know the long term, but for the mid-term, I’d rather be long of AUDUSD when I see a sign of upward impulse wave formation:

Thanks for reading my blog, and hopefully next year will be the busier one in terms of trading and posting. I wish all of you a good luck in 2012!

* I stopped trading metals after the regulation horizon got unclear for non-institutional traders.

Complex Elliott Wave of EURUSD (daily and weekly charts)

On September 22, I successfully exited after being short EURUSD for two weeks from 1.3960 to 1.3450. 1.3450 was my target and I did not care how much further it’d go down from there. The bottom was 1.3146. Soon after I expressed my view that EURUSD may not get downward pressure for long from there as in the previous post, EURUSD started to rebound strongly. Actually I had been anticipating a EURUSD rally after the pessimism as you can see unrealized X in the chart I posted on September 5th.

Now looking forward in the weekly chart, I am split into the two slightly different scenarios. Scenario #1 is telling me that b has been marked and EURUSD will rally towards X (1.5350 or higher) without making new low since Oct 4:

In Scenario #2, I am seeing a possibility that the current rebound is .b of uncompleted b , so EURUSD will go further down to 1.2450~1.2500 in coming weeks:

Below is the daily chart if I take Scenario #1. In the very short term, I may be able to take short position from b to c. But I have not made up my mind to participate in this trade. If anything, I’d be conservative since my view is split in two scenarios.

Real time trading tweets

The plan in the article may get rejected any time, so please check out my tweets on Twitter.

Current risk exposure:

Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

Capital growth

From recent 100 trades (%) The growth right before the 1st trade is set to 0%.
About this graph


From recent 100 trades (%)
About this graph

Total returns

Since inception
(Aug 10, 2009)
Year-to-date Quarter-to-date
0% 0% 0%
This is a normalized value: the return on each trade is normalized against the capital just before the trade execution. This way, it is eliminating the effect by the capital change from deposits and withdrawals. The calculation thus reflects the trading performance of each trade. The value does not contain unrealized profits and losses. RM's trading strategy never risks more than 5% of the present capital. Not including subtraction by tax.

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