Updating on 8/2
I decided I wanted to take a stab at some day-trading, and that started with this trade. I didn’t want to spend the time doing the full RSW, looking at the basket charts, so I looked at the RSW comparison and pulled a couple of pairs from that.
A couple of side notes: 1) I’m still not 100% sure the best look for the RSW comparison chart, though I think I’m getting better at using it. I understand, better, the time frames I’m looking at and I realize, especially with day-trading, that I’m just looking for a place to put my focus. 2) I’m not sure if I ever will go back to doing a full RSW analysis based on the baskets again. I’ll still use the baskets and glean overall directions, but I think I was using the full analysis to make myself feel busier; when, really, my focus needs to be on making trades. The volatility indicator that I looked at today will help with that (though that’s neither here nor there)
I came across EUR/JPY using this method, and looking today, I’m not 100% sure what my thought process was. I’m looking at the daily chart now from that day, and while it had been trending down over the last ~5 days (and maybe overall since the beginning of the month), It was really pushing up since March. I was looking at a 1min chart to trade on, though, so I put more weight into the recent movements over the overall movement. Plus, RSI was below 50 and the MA’s were touching, so there were weak signals.
Entry – 136.66
Target – 136.4
Stop – 136.8
Entry – 136.659
When I looked at the 1min chart, price had been pushing down for the entire day, and officially trending down for the last 1.5 hours. Looking at it just before my entry, price pushed through a support area that held twice, then was retesting that area and looked to head downward. I put an entry order in.
Exit – 136.8
Price largely based between my entry and stop once I got in, eventually pushing up (in ~8 min.) and stopping me out. As far as a day-trade goes, there’s nothing that suggests it would’ve been profitable had I not gotten stopped out quickly, so It’s just a straight-up loss. One I recognize now, too. I shouldn’t have taken this short with the overall trend pushing up, so that’s on me. I’d prefer that, though — the knowing — than the alternative. This was a good analysis on a bad trade; I call it a win.
