Welcome to another entry in my Forex market trading blog/journal. Today, I’m talking through a trade I made in CAD/JPY while I was out of town. Read on to see how this trade played out.
I wanted to take this down even though the trade hasn’t triggered at this point. This might not have been the smartest move since I didn’t do a full analysis this morning. I just looked at the charts I had pulled out on Tuesday and went with that.
I picked a pair that I had already determined the direction on, the trend was up. Price was close to breaking out and wasn’t overbought and it appeared to be completing a bull pullback. I’m in San Diego, so I did an abridged workday, but for all of these reasons it wasn’t a bad trade.
That said though, since I didn’t go through my whole process, I’m wondering if was a good trade. I can’t act with fear, and I liked it enough to set an order, so I’m going to leave it with confidence (unless, of course, price reverses hard and makes the pattern no longer viable).
After stopping me out of my trade on Tuesday, CAD/JPY’s price made a significant spike up on Wednesday, but fairly quickly pulled back from that high. When I got to this chart again on Thursday, price had made another rally and was up near the highs it made on Wednesday. Not only had price reached that level, it was making a pullback from those highs, forming what looked to me to be a great tradable pattern.
Entry – 109.14
Stop – 108.98
Target – 109.5
R:R – 2.25:1
Entry
I liked the potential of the breakout, but with my target, putting my stop below the lows of the pullback would have given me a terrible R:R. I thought the resistance area that was broken was strong, though, and that there’d be a sustained rally on the next push up, so I found a “better” stop level. Price made a minor key area before the pullback, which is where I put my stop.
Exit
Price largely danced around my entry after triggering me in to the trade, but never made the strong push up I was expecting. Eventually, price reversed and pushed down just enough to hit my stop, which moved a couple pips above my original stop level.
I liked the overall direction, I liked the potential on the break, I liked the pattern and nothing seemed extended or overbought so I’m not sure how “bad” of a trade this was. Sure, I didn’t do my full routine, which I need to be more consistent about doing. But technically, it wasn’t a bad trade. Looking today, too, if I hadn’t been out of town and using a trailing stop, this would have been at least a break-even trade because price made another, stronger push up after triggering my exit.
On one hand, I think I need to make sure I’m doing all of the things I need to do before trading, to put myself in the best position to win. On the other hand, though, I often feel like I take things too seriously sometimes, and overthink things. And on some weird mutant third hand, I specifically got in to this business so that I could work on vacation and not miss a beat, no matter where I am.
Another negative (with hindsight being what it is): I probably shouldn’t have had this pair picked out in the first place. I recently analyzed the previous trade I had in this pair, and realized that I wasn’t super bearish in JPY, I had just chosen it at the time because I didn’t see anything else I liked. When I got to the pair again for this trade, that never occurred to me.
I still feel like I’m working toward more consistency with my trading and my routines & habits; and with that in mind, there are some positives here.
I need to realize that, while patterns are important, they’re not the only thing I’m trading. I’m trading support and resistance areas, volume, news events, sentiments etc.
Clearly, as I mentioned, I overthink things. I can barely journal this trade without overthinking whether or not it was a “good trade”. Maybe it was simply one of the more-than-half of my trades that will end up as losers and I just need to move on. Regardless, that’s what I’m doing.
Thanks for reading! Let me know what you thought about this trade and if you’ve been able to catch some pips in CAD/JPY. And stay tuned for more Forex trades and analysis.