Today was a special day. In global news, Canada decided to cut rates, Yellen spoke again restating that a rate hike is around the corner, and a protest broke out in Greece. When the Bank of Canada cut rates from 0.75% to 0.50%, it attracted many investors to short the Canadian dollar, especially against the strong US dollar. This sent the USD/CAD pair flying 150+ pips in the matter of minutes.
As for my trading, every execution but one went flawless. I was able to short the AUD/USD, got some pips in the USD/CAD rally, and caught scalped pips in my usual major pairs. I would’ve been up around $30 for the day except I made one mistake. Early in the trading day I saw some traders talk about a pair I never traded before, the GBP/AUD. Although I knew the GBP was strong since yesterday, I did my quick analysis and decided to short the pair. I had no experience with the pair and did feel like it was overbought.
I thought I played it safe by shorting the exotic pair with just 2K lots. Now, I don’t really know GBP’s or AUD’s relationship with the Canadian dollar, however, this pair went flying to the moon once news of rate cut broke out. To my surprise, it went much more higher than USD/CAD! I was taken back by this and didn’t know what to do. In my head I thought price would reverse but nope, kept on going. Because of me trying to short a new pair today, I learned my lesson. You need to do a proper analysis before entering a trade with a new pair. But wow, I’ve never seen a pair move so high, especially from a news that was not related to the corresponding currency pairs.
Red arrow was when I shorted.. right before a monstrous rally.