Not very welcoming trading conditions today, as far as I’m concerned. While most currency pairs registered goos size moves, bulk of them came after sharp reversals and failed breakouts. Most useful strategies for the day could have been fading techniques. Days like this happen every now and then, but current situation can be largely “blamed” on holiday like conditions, something I mentioned before. Liquidity dried out or, in other words, volume dropped significantly.

More inconvenient though, from the point of view of retail trader, some brokers widened the spreads already. Primary broker I use for the account featured here raised the cost of trading significantly. It is in sharp contrast to other platform, where spreads are largely unchanged. For some pairs I found it intolerable and not worth trading with. If spread doubles of triples it will have large effect on potential profit and very often can make or break trades, especially now when I’m looking for modest gains. This led to adjustment of some strategies and parameters of transactions. Not all. NZD-CHF buy order was left unchanged, mostly due to strength that Kiwi showed in all its pairs.

This set worked out really good. New Zealand Dollar moved strongly and reached objective of 0.7405 fairly fast, for 50 pips profit. Highlight of the day, really. Particularly given how few trades I’m taking this week. At any rate, NZD, the way it behaved, put a wrinkle on my other trade, buy in AUD-NZD, or rather intended buy. This trade was cancelled.

The closer price came to entry, the worse the set up looked. Going against Kiwi didn’t seem like a good idea any more, because of the chart patterns developing on other NZD charts. But most detrimental here were the details. On this platform spread jumped to almost 3 times normal, while OANDA, for example, left it at normal level, or almost. This also led to chart discrepancies. Hourly graphs became different enough between brokers to make me think twice about it. Even I decided to use another platform, the entry would have to different , 1.2565 or something like that. In short, way too many question marks popped up, so I simply cancelled the trade. Now a new buy order is placed at 1.2555, but ONLY when conditions return to normal, probably after New Year. Meanwhile, current level at 1.2460 or so, could provide decent short term trade, if spread is at 6-9 pipsor so and strong reversal pattern forms later on today.

With EUR-CAD after a losing trade yesterday, I decided to simply track it with a buy order. Currently it stands at 1.5033, but I will be adjusting it if another minor high is formed lower. Not much to add, other than objective has not been determined yet, but most likely will be in 50-70 pips range. I think Wednesday will be the last relatively active day before the weekend, so, conditions permitting, I’ll try some short term trading (5-15m charts) in Yen pairs. Results tomorrow.

Mike K.