Welcome to my investing and trading blog. This is where I share my thoughts on various financial markets (primarily the Forex market) and discuss the trades that I make. Today, I’m talking about a short trade I made in the Cad-Yen currency pair. Read on to see how this trade played out.
I Didn’t do a full analysis this morning, but this was largely the only thing I really liked on the day. Price has been weak, but over the last several hours has been on a rally. The rally has gotten to the upper band on the 1 hour and 15 minute charts and seems to be pushing down from that level.
My entry point is a bear-rally on the 5 minute chart (could also argue a base) — with a wide stop due to the spread. My target was a doubling of the risk due to, again, the wide spreads. Maybe that’s my first mistake, but as of right now I’m letting it ride.
RSI is pushing below 50 on the 5 minute chart, though I will say price never got into overbought territory — only close. I know my rule is to make sure price gets in to overbought/sold territory, but I still like this to the downside and don’t want to miss the trade. Maybe that’s my second mistake already, but again, I’m letting it ride.
Entry – 105.5
Stop – 105.68
Target – 105.11
R:R – 2.2
I think I’m feeling a bit behind because I didn’t trade at all yesterday and took a loss on Monday, so I want to get in. That could be why I’m letting this trade ride. But it is within my “guidelines” I’d say, so I’m alright with it. I’ll certainly cancel quickly if things go against me. Hopefully they don’t! Let’s see what happens.
Entry – 105.498
Oh, I may have made one last mistake here — and that’s putting my entry at a level that was between key areas in the recent history. It’s definitely below the current support area, but is sitting above the next one. It’s the 5 minute chart, though, and these are only a couple candles worth of support/resistance, so I’m not really worried about that. The trade triggered as I typed this paragraph out, so we’ll see how it goes.
Exit – 105.68
Price pushed down and triggered my entry, but made a bit of a rally from there. The rally pushed up to within the base/rally that I originally shorted, so I was comfortable with that. From there, price made a sharp drop, pushing down from the highs of that range down to ~4 pips in profit (a 16 pip drop in a couple minutes). I thought that was the push I was looking for.
Unfortunately, that was the furthest price pushed, and it started rallying again from there. That rally, initially, was minor, and I thought I was still in the clear to make some pips here. But a few minutes later, it made another strong push and stopped me out of the trade.
I called out a few potential mistakes here before this trade even triggered so I should’ve stayed away. This was very undisciplined. Additionally, I could argue more of a reversal occurred, and I should’ve taken this long on the dip, but that hasn’t played out yet.
Ultimately, I think I just took this trade in order to get another trade in, and I didn’t do so to make a great decision. I need to be better. Again, can’t go back, though. All I can do is to try to just keep swimming.
What did you think about today’s trade? Use the comments to let me know, or if you want to just offer me words of encouragement. I’m doing my best to clean up these mistakes, but I’m only human. Thanks for reading, and stay tuned for more financial market analysis and trades!