The madness continues. Swings by hundreds of pips, even thousands. Yes, thousands. One of those was EUR-AUD which moved over 2000 pips today. Wow! I was watching it unfold, there were jumps of 40-50 on a tick! But so was the spread with my broker. Rough trading. Australian dollar is the new whipping boy. What a fall from glory of just couple of months ago. Hourly chart shows fluctuations that normally happen on monthly charts. It’s absurd. These type of moves generally indicate a blow out top. That is why I’m going to try a short trade here.

I have an order to sell at 1.9960 looking for at least 500 pips, maybe even 1000. Risks are big but so is the target. Since I’m looking for such a large objective, position size is smaller.
Big time news just keep coming out. Central banks around the globe cut interest rates in coordinated move, European countries are doing their own “bailout” of failing banks, so is Russia, Fed made a guarantee for short term corporate debt, on and on it goes. Next to impossible to digest it all. That’s why I’m sticking to short time frames, especially since the moves are so outrageous. Just like I said yesterday, I’ve been buying EUR-JPY on 5M charts.

Early on I made 55 pips, shortly after that I took second trade and was stopped out for a 50 pips loss. Market promptly fell 400 pips like nothing. I started to look for next trade.

That was my money trade, 96 pips gain. Market fell again 300 pips. I was done for the day.
I’d like say that swings become smaller and more manageable from now, but markets are SO event driven, and there are so many announcements coming out all the time, it is hard to develop any opinion. Except for my intended position in EUR-AUD, I’m sticking to doing the same tomorrow, buying short term upside breakouts in EUR-JPY. Let the madness continue!

Mike K.