Welcome to my trading journal, where I discuss my activity within the Forex markets, and others I dabble in. In today’s entry, I talk about a mistake I may have made that resulted in a losing trade.
I wanted to take another shot at trading overnight, and this is where this trade comes in to play. Originally, I planned on doing a full RSW in the afternoon to find pairs, but I was lazy and didn’t do that.
If I’m going to continue to try to do overnight trades, I definitely want to get into the routine of doing another analysis, instead of just picking a pair that I liked that morning. The whole point is to figure out how the currencies moved during the day to determine where they may go overnight. I need to be better.
Entry
Anyway, I didn’t do all of that, but I did end up looking at AUD/JPY at the end of the day. Price was in a nice, high-base, but was sitting a little below the most recent highs — which was also the level I wanted this to break in order for me to trade it.
I figured, if price were to push up to/through that level, it would be a far enough push that the breakout would be confirmed. Since the breakout would be confirmed, I put my stop at the highs of that base, not the lows, which is also where I needed to put it to get a good R:R given my target.
Price continued moving sideways for the next couple hours, but eventually did push up enough to trigger my entry in to the trade.
Exit
Unfortunately, though, within the hour, price pulled back strong and hit my stop for a full loss. Even though I had set a trailing stop, the push up that triggered me in to the trade was as far as this went, so my trailing stop never had a chance to, well, trail. In fact, the candle that triggered my entry to the trade closed below my stop-loss.
In hindsight, this was just a bad trade. I didn’t trade in the morning, and I think I was just itching to get in to something. There was a high base that was formed, but I didn’t play the base. I kind of played a re-test, without there actually being a re-test.
In the moment, I even second-guessed myself. But said that I did the work in picking out this pair, I liked it long and there was a high base, so I took the shot. Price did end up rallying and made it to 1R, so I wasn’t completely wrong, but there was a part of me the whole time that thought it was a mistake.
I am trying to minimize my fear in trading, and I think subconsciously that was another reason I ended up getting in to this trade, but I’ve been doing this long enough that I should’ve trusted my instincts and not gotten in here. Live and learn.
Not the best result today, but I’m trying to minimize mistakes and the first step to that is identifying them. I was able to do that, so there’s a silver lining in the dark cloud of the loss. What did you think about this trade? Let me know in the comments, and let me know about any mistakes you’ve made that you’re trying to learn from. We get better together.