Trading an RBA Rate decision.
Assumption on my part, rates on hold (or cut).
1425 AEST, set up a SellStop 0.02 below stable price...
If I thought the RBA could raise as well as hold, or cut, I would have set up a straddle, where a BuyStop is 0.2 above and a SellStop 0.2 below where One Cancels Other(OCO).
1434 AEST SellStop hit, account balance bubbling nicely (not expecting too much more maybe another 0.2 to 0.3 from the chart level to around 1.090 to 1.088).
Trading 101: SellStop
http://www.piptrader.com/type_of_orders.asp
Entry-Stop Sell Order
Entry-stop sell order enables you to place a sell order below the current market price. The order will become working order when the price is hit. For example, EUR/USD is trading at 1.2000/1.2003. You predict the price has a downtrend of 50 pips in the next 2 hours. If the price reaches 1.1150/1.1153, then the downside will transform into a momentum driven trade. However, your strategy or gut feeling tells you that if the price doesn't reach 1.1150 within 2 hours, upward movement is seen. In this situation, you would place an entry-stop sell order at 1.1150. If the price doesn't hit 1.1150 within your expected time, you can cancel the pending order.
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