Hi Zidane, (and others)I'm not sure what do you mean exactly.Are...

Hi Zidane, (and others)

I'm not sure what do you mean exactly.

Are you asking how you place a Stop Loss or a Limit order (in this case a Sell order) ? or are you enquiring about my approach ?

However I'm pre-empting that you might be enquiring about the methodology that I use, so here it goes (as far as this particular trade is concerned).

- As you are probably aware, there appears to be a fairly strong correlation between the USD crosses and the fortunes or behaviour of the US share market ( the Dow Jones).

If the Dow goes up, the USD seems to weaken against its major crosses, of which the Aussie dollar is one.

If the Dow comes down, both the USD and also the JAP Yen seem to become stronger against the other pairs.

As you're aware, the Dow has taken a pounding and whenever something like that happens or there are 'tragic' news e.g. 9/11, Mrs Bhutto, etc. the USD and the JAP become very strong against the other pairs and often this presents opportunities to go short i.e. to Sell the AUS -USD pair now and buy later at a lower price.

Still with me?

As I was saying, the US market has been taking a pounding and the Dow has been coming down heavily. This has caused the USD to strenghten and thus the reason why the AUS has been so low, almost to a long term Support zone. It does appear to be crazy, but true !!

The market now appears to be consolidating (fingers crossed) and our Aussie market is also finding support. However, it has more to do with what the Dow does than the All Ords, I suspect.

As the AUS-USD pair appear to have found strong support at the long term support area and did not penetrate this support down but instead it has broken up, I thought the odds of continuing its uptrend movement were quite good.

My calculations in terms of Stop Loss of 100 - were based on the assumption that the strong upwards movement might support any short term reversal and might not go below the Fibonacci of 61.8% which, at the time I calculated at slightly above 0.8600.

The Sell Limit order for a profit of 200 pips was based on another Fibonacci, this time being calculated from the top (I'm using Daily bars) of the 15th of January = 0.9022 as the High and the Low of the 22 Jan = 0.8510.

I thought that the retracement upwards might at least go the the next Fib level of 23.6% which came up at 0.8900.

Please don't for a moment think that I am an expert - far from it.

Above all I sincerely hope that it turns out well, as it would sadden me to learn that anybody lost money by following my suggestions.

Cheers and take care and above all please be sensible - all of you.