Welcome to another entry into my trading and investing blog. Today, I’m analyzing a short trade I made in the Forex pair EUR/CAD. Read on to see how this trade played out.
This was spiking this morning when I first looked at charts; but looked like it was approaching overbought territory on the 2 hour chart. I set an alert to let me know if price started to reverse, so could short this as it returned to the mean.
Entry – 1.468 Stop – 1.469 Target – 1.466 R:R – 2:1
Entry – 1.468
I got that alert, and price had pushed back to the key area I’d want to short through, and rallied from there. I, of course, am playing the mean reversion so I looked for entries right there. I found a good target and an entry/stop that made sense with a 2 R:R, so I set the order. It didn’t take much time at all for price to push down and trigger me in to the trade.
There wasn’t a ton of activity immediately after triggering my entry, but price overall remained weak. There appeared to even be a mini base that formed around my entry. Eventually, price did make a decent push down, and got to near 1R. Wanting to lock in profits, I moved my stop to break even around this time.
Exit – 1.468
1R was as far as this pushed before price rallied up to my entry. With my stop now at break-even, that’s where it was triggered for no gain or loss. I supposed I’ve said that I don’t want to take counter-trend trades in the name of a mean-reversal strategy, but that’s exactly what I did here. And it’s hard to say if it was a mistake or not because it was a break even trade and the best trade of the day.
Overall, I don’t want to get in to the habit of trading counter-trend trading. But I’m not terribly upset with this result.
Thanks for reading! Let me know in the comments what you thought about today’s trade. And stay tuned for more financial market analysis and trades!