When trading different currency pairs, it is important to be aware of the time-frames you are trading in so that you can take advantage of different moves. Today is a perfect example of this scenario. So far this AM’s biggest losers are the commodity currencies. The Aussie dollar (AUD), Canadian dollar(CAD), and New Zealand dollar (NZD) are all losing ground against the US dollar (USD) and the Japanese Yen (JPY).Does this mean it is time to get short? Not so fast. In previous articles Sean Hyman has made a great case for these currencies and frankly the charts don’t lie! The uptrends on the commodity currencies have been going up steadily and the fundamentals are in place for their rally to continue. But what to do about a day like today?This is where looking at different time-frames can help you. Take a look at the charts below. The first chart is a 5-minute chart of the AUD/USD pair. The lines drawn on the chart represent short-term resistance, so trades entered on the short side near those resistance points would provide low-risk entries for a short position.(click on charts to enlarge thumbnail)
The chart on the right side is the daily chart of the AUD/USD pair. As you can see, the trend is clearly up. Which means that you want to be long, and brings us to the theme of the day, that you can be in opposite positions on the same pair at the same time! This is known as “hedging”, and can really help add to your profits and help limit your losses.Recently the NFA (National Futures Association) outlawed this practice here in the US, but savvy currency trading firms have figured out a work-around. If you would like to learn more about hedging or how you can participate, email us at: sales@fxedu.com.
The chart on the right side is the daily chart of the AUD/USD pair. As you can see, the trend is clearly up. Which means that you want to be long, and brings us to the theme of the day, that you can be in opposite positions on the same pair at the same time! This is known as “hedging”, and can really help add to your profits and help limit your losses.Recently the NFA (National Futures Association) outlawed this practice here in the US, but savvy currency trading firms have figured out a work-around. If you would like to learn more about hedging or how you can participate, email us at: sales@fxedu.com.
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