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Currencies AUD Top Trade Idea For November 7th, 2014 – AUD/USD

cmcMy trade idea last week looked at selling on a break out of a bearish flag pattern. With this now triggered the next step is to think about exit strategies.

A common approach for chart patterns is to build trading strategies around measured moves. With flag patterns, one idea is to project the height of the Flagpole (AB) from the highest point in the flag pattern “C”.

Here’s one approach to exit strategies based on this measured move:

  • An initial fixed stop loss behind resistance inside the flag pattern
  • Move the fixed stop behind any successful re-test of the flag support
  • Change to a trailing stop loss once price hits 61.8% of the measured move
  • Use the measured move as an ultimate profit objective.

trade todat

About Ric Spooner

ric spooner

Ric Spooner is Chief Market Analyst at CMC Markets in Sydney. He has over 30 years experience in derivates markets, and was previously a Managing Director at Sydney Futures Exchange Clearing, General Manager at JBWere Futures and Manager at Elders Futures.

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