Forex : 2nd May : AUDUSD New entry

P&L Running Total - b/fwd Nil - Today Nill - c/fwd 1R Loss

I have been a little slack with my FX articles.  When I was able to trade FX for real money I had a much more dedicated approach - now I just look from time to time but I will endeavor to get at it a little more often.

Having said that - one of my constant problems with FX is to be right at the wrong time.  So I would buy, get pipped out, then watch while the pair rose - rinse and repeat.  That can be very annoying but, worse than that, it chips away at your mental capital making it harder and harder to trade profitably.

A method I have used on stocks in the past was to buy calls during dips then sell them once I hit a decent return.  I actually did quite well at this probably around 10 years ago but have since given it up because I wasn't making enough for the risk taken.  This was primarily due to trading these options in Australia with expensive brokers and pretty ordinary market makers.

So I was looking at the Aussie yesterday and thought "why not try the same tactic on FX?"  Take a look at this chart

I see the Aussie on a nice up trend with a decent dip (note, this is today's chart but it hasn't moved much since I priced the option) .  I could just run out and buy Aussie but NFP is just around the corner etc etc so I looked up the at the money call

 So lets buy a call spending 1R.  It's costing me 20.1 and expires 18th June.  I can't lose more than I spend and I have the best part of seven weeks to see if I am right.

Disclaimer
I am not a financial adviser.  These are paper trades.  I am not suggesting you follow these signals.  If you take any action based on my blog you do so at your own risk.