Welcome to my blog! This is where I share my thoughts on the Forex market and discuss the trades that I make. Today, I’m doing just that. I made a couple of trades, and while they didn’t work out as I would have loved, I still learned from them, so that’s a win. Read on to see how these trades played out.
USD/JPY Short
Expected Entry – 145.5 Stop Level – 145.65 Target – 145.15 R:R – 2.33
First off, let’s take a look at my thoughts from this morning:
On one hand, this has made an outsized spike that I could argue is a reversal move to the upside — especially given that RSI never got into overbought territory. On the other hand, price has failed at the upper band, and appears to be seriously threatening to push back down. Is this just another higher low in the midst of starting an uptrend? Or will price actually push down? I guess that’s why we set the orders: to find out.
Dropping to the 5 minute chart, Price almost looks like it’s rolled back to the downside, and actually is showing me a pretty clean bear-rally right now. There is some resistance at this area, but there’s actually more support. I can see here already that the numbers should line up; the spreads are also not terrible, so I’m going to take a shot here.
Entry – 145.498
Exit – 145.65
The bear-rally looked really good to me, and price was heading downward, so I stepped away from the computer for a few minutes. While I was away, I got the notification that my trade triggered. Very nice. It wasn’t long, though, and before I could make it back to the computer to even look at the trade, price reversed and pushed up enough to stop me out for a full loss.
It looked like price just started to range from there, and no longer had much weakness behind it. It’s unfortunate, but time to just move on.
The pattern was good here, the overall direction was good here (post-trade, price didn’t move drastically against me. It largely stayed in a range and as of 4:40pm is sitting a few pips below my entry), and it was a pair I picked coming off of a corrective move.
I can’t see much that I really dislike with this one, from the perspective of my analysis and reasons for taking the trade. It’s just one of those that happened to not work out. I’m more upset about the fact that I don’t find more opportunities than I am about losing this one. The law of large numbers doesn’t really work out without large numbers. I like where I’m at right now, though. I have been steadily trading more and more week after week. Some days the opportunities aren’t there, and that’s alright. Just keep swimming.
GBP/AUD Short
Expected Entry – 1.9118 Stop Level – 1.91330 Target – 1.90970 R:R – 1.4
I was ready to disqualify this earlier, but after returning to the chart, things are looking better. Price is dropping pretty hard off of the upper band, and RSI is sloping down out of overbought territory (on the 5 minute chart). Right now, I’m just watching and hoping for a small rally to short in to because I like this to the down side again.
As I’ve been watching, price has seemed to stall (on the 5 minute chart); albeit at the lower band. RSI is still sloping down, though, and the faster line is below 50. I like what I see, but at my numbers right now, I’ve only got a 1.4R:R, which isn’t enough. A part of me wants to take the trade with half of a position size, but I feel like that defeats the purpose, given a lesser R:R ratio. Price is basing pretty well, though, so I’m at a crossroads.
It would certainly be a missed trade if I don’t pull the trigger here and price does push down. But at the same time, I’m not sure how confident I am in the drop — actually, I take that back. I like price to the short side, it’s a matter of how far this could go that’s giving me pause.
I think I’ll pull the trigger here. Even if it ends up being a loss, I did do the work and I do like the direction. I’ll just be quicker on cancelling the order if price moves against me before it triggers, and I’ll be quicker on moving my stop to break even if price does move in my favor. I might not even get the chance because price is spiking as I’m typing this.
I’ll open the order, though, and see how things play out.
Changed Outlook – GBP/AUD Long
Expected Entry – 1.91420 Stop Level – 1.91230 Target – 1.91820 R:R – 2.1
On the 5 minute chart, price pushed above my stop, and I no longer liked this short. In fact, after pushing above my stop, price pulled back to about half of the recent up move (which started at the lower Bollinger Band), and the slower RSI line pushed back above 50, so I’m switching my outlook to a bullish one, and trading this bull-pullback.
My target is the top of the range on the hourly chart, and I’m offered a 2+R:R to that level. I’ve opened the order with half of a position size (being a bit wary, changing my mind so quickly), and I’m planning on being quicker/more conservative with my cancelations and trade management.
Entry – 1.9142
Exit – 1.91447
I didn’t have an exact number I was looking for to move my stop to break even; I initially figured I’d do about .5R. Price started somewhat stalling around resistance, though, so I used that opportunity to lock in profits. From there, price started stalling a bit, and even pulling back slightly; but it was all within a framework that didn’t bother me.
Eventually, on the 5 minute chart, the SAR dot got to (and started pushing through) my entry point. When actively managing (as opposed to using a trailing stop) I move my stop to the second-most-recently formed SAR area above my entry point. That’s what I did here, and unfortunately that’s as far as I was able to move my stop before price reversed and hit it.
It was in profit, so I’m not terribly upset about the outcome, but there are two things that are frustrating with this trade. First off, when my exit was triggered, the candle was still well above my stop loss. Maybe 3 pips in TradingView. It was even still above my exit level when I grabbed my screenshot. I hate when slippage stops me out like that. I need to be more wary of the spreads when I’m managing my trades, too, not just when I enter them.
The other frustrating thing is that stopping me out was the lowest this dropped in that time-period, and from there price pushed up to a little above 1R. It hovered around there for a while; and it’s hard to say exactly where I would’ve gotten out, but I think I would’ve netted at least 15 pips — opposed to the ~3 that I did get.
Ultimately, I should’ve been a bit more patient, paid attention to the spreads, and not been so quick to move my stop into profit. I liked where I moved to break even* and honestly I liked the fact that I was able to be flexible enough to change my outlook here based on the price action. Hopefully tomorrow I find more opportunities and learn from these mistakes!
*probably because it closed in profit — if it closed at break even, I’d be upset at how soon I moved it there..
Not the most financially successful day, but it was still a good day. Let me know in the comments what you thought of these trades and if you would have done anything differently.
Thanks for reading, and stay tuned for more Forex analysis and trades!