Welcome to my trading blog. Here, I analyze the financial markets, talk through opportunities I see, and explain the trades that I end up taking. Read on to see how this long trade in the Forex pair EUR/AUD played out.
Over the past several days, I’ve had a few instances where I’ve entered an order, but price reversed before my order triggered, so I cancelled it. It’s a pretty big issue that I’ve been having lately with trading on one hour charts — I’m getting in to very few trades.
To remedy that, for the foreseeable future, I’m going to go as low as the 5 minute chart to look for entries. Which means I’m going to start my analysis on the 2 hour chart, maybe 4 hour chart to find overall direction and targets. I liked the idea of trading the 5 minute chart before, but in doing RSW, I feel like I was finding pairs at the ends of their moves.
With my new strategy of looking at pairs based on volume, not what each individual currency “should” do, I’ll be better suited for shorter-term trading; given that I won’t have a bias going in and I’ll trade purely the price action that I see. I’m actually a little excited about this.
Entry – 1.674
Stop – 1.6707
Target – 1.685
R:R – 3.33
All that said, though, this is the first trade that triggered in six days. This had been on my radar for at least a week now, but it didn’t look viable until today. About 2 – 2.5 days prior to this trade, price peaked and began pulling back. Looking today, price seems to have bottomed out and looks to be returning to the upside. It’s been strong for about 12 hours now, so I’m going to look for entries.
Entry – 1.674
When I got to this chart, price had made a push to a new swing high on the 15 min. chart and was in the process of pulling back. The level it pulled back to was a minor key area that formed on the way up, which made this look like a bull-pullback to me.
As I mentioned earlier, I was trading this on the return to the uptrend that had formed late September. So setting a target at the highs that were created before the pullback a couple of days ago; with my entry and stop essentially at the highs/lows of the most recent candle, I’ve got over a 3 R:R. I set an entry order, so we’ll see how it plays out.
Exit – 1.6776
It was about 2.5 hours after I entered my order — price largely based after the pullback — but price eventually made a nice push up and triggered me in to the trade. From there, price moved sideways again for a while.
Eventually I had to call it a day, so I changed my stop to a trailing stop. Price ended up making another strong push up and made it to about 70% of my target before pulling back. The pullback was deep enough to hit my trailing stop, but it was for a nice 36 pip profit.
Conclusion
I’m still trying to figure out the best way to manage my entries/trades when they take a long time to trigger. Typically, as long as price hasn’t done anything to invalidate the trade (such as pushing significantly above/below my stop level) I’ll let it ride. But on the other hand, I was taught that the largest moves tend to happen when they happen immediately after the pattern forms, not many candles later. I don’t have a definitive answer now, it’s just something I want to keep in mind.
Overall, this was the first trade with a new strategy, and it worked out pretty well! I’m excited to continue to implement it. Let me know in the comments what you thought about today’s trade and stay tuned for more Forex trades and analysis.