This week brought me three new trades: sell order for EURJPY and buy orders for USDCHF and CADJPY:
EURJPY was showing strong downtrend after an upwards move which lasted for 5+ months. The ADX also confirmed this downtrend:
On H4 time frame, I saw a strong rejection in the direction of overall trend:
After a big downward move, I decided to move my stop-loss:
When profit was somewhere around 22HRK (local currency), I have decided to close 50% of the position because I saw sellers struggling to push the price even lower. We will see this will work out until the end of the week. In the worst case I will have a small profit.
Daily timeframe was showing a very strong uptrend, which was confirmed by ADX indicatore, and HHs and HLs on MACD:
I entered the trade after a breakout of small consolidation area which lasted for 28 hours. What didn’t concern me (and it should have been) is that this consolidation are was made of candles with large upper wicks, which indicated strong rejection opposite to the overall trend:
What I also didn’t consider is that the breakout itself was made of small green candles which didn’t indicate some kind of strong conviction from the buyers: next time I should check the lower timeframe and look for a breakout made of 1-2 candles.
That’s why I moved my stop-loss a little bit and, at the end, the trade ended with a 35,93HRK loss, which is not a huge loss considering my recent profit:
I took this trade at the end of the week and the price is currently going towards my take-profit level, but it wasn’t a perfect trade because the Keltner Channels didn’t show strong uptrend. On the other side, the price created HHs and HLs on a Daily timeframe:
There was a strong rejection (pin bar) on H4 timeframe and ADX was also showing potential change in direction:
In the meantime, my EURUSD trade finally managed to get to my take-profit level for additional profit of 50,50HRK. My NZDUSD trade is still open and, from what I see based on price action, there is a good probability that the downtrend will continue.
From what I can see at the moment, my trading system/methodology is doing fine. But what I have to make sure is to focus on preserving my capital (exit losing trades as quickly as I can). On the other hand, I have to be aware that the profit I had in last two weeks still doesn’t mean that I have an edge.