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Lessons: It could be argued that exiting early may be a case of 'not letting my winners run'. I more so feel it is a case of missing an important technical pattern when analysing the trade opportunity. Even if it is the latter, I need to pay more attention to this. I still think there's a good chance that the pair will break out of this pattern though (which could be my next trade).
Can you help answer these questions from other members on NexusFi?
Instrument: USDJPY
Direction: Long
Technicals: Higher highs for entire week in constricting flag pattern
Fundamentals: BOJ QE gives JPY bearish outlook
Market Conditions: Abe giving press conference which has acted as catalyst for breakout of flag pattern. There is a G20 statement due at some point before the weekend which does add risk to this trade.
Entry: ~98.83
Stop: 98.354
Target: 99.31
R:R: 1:2
Summary: Now that flag pattern has broken to the upside, only obvious target is the magical 100 mark, so have set target just below that.
Happy to finish the first week of my journal in the black. No lapses in discipline, each trade carefully researched - I'm aiming to do the same this week!
Event risk: The news docket is fairly light early in the week with no major announcements due until Wednesday (GMT+10). I will therefore be looking to make predominantly technical based trades early in the week, looking for opportunities to fade the top and bottom of ranges or channels. Later in the week there are some big news events that have a scope to really move the market. I'll be looking to watch those closely and take some positions based on likely outcomes of those events.
Critical levels:
USDJPY pushing to break 100
EURUSD hovering just above 1.3
Instrument: USDJPY
Direction: Short
Technicals: Large resistance price barrier at 100 that will take some effort to breach.
Fundamentals: BOJ QE gives JPY bearish outlook
Market Conditions: USDJPY gapped up over the weekend. I feel it's likely that the gap is likely to be filled and price will slowly retrace towards 99.5 early this week.
Entry: ~99.8
Stop: 100.03
Target: 99.47
R:R: > 1:2
Summary: Despite being counter trend, I feel this is a high probability trade with limited downside.
I cut this one short of the initial target after it was clear the little thrust down was losing steam. Still, starting the week with a small win, so that's nice.
Well, this should be a lesson to me - price eventually fell to hit my original target. I have to learn not to let trades play out, even if that means taking a loss after being in the black on a trade every now and again. Not doing so will eventually destroy my R:R.
Instrument: EURUSD
Direction: Short
Technicals: Big support at 1.3 that is just waiting for a fundamental catalyst to bust through
Fundamentals: Eurozone PMI figures coming in weaker than expected.
Market Conditions: Been a slow day thus far but expecting a big spike of volatility when the announcements come through
Entry: 1.30257
Stop: 1.30717
Target: Wait and see... if price goes through 1.3 it could be a big move which I might trail.
R:R: Undefined as I've not yet set an exact target, but I'm hoping for at least a 100 pip move.
Summary: If these news results can cause a break of the 1.3, a big move might result.
In opposite fashion to my last trade, I held this one too long. Profit peaked at over 50 pips, but I decided to put a 20 pip trail stop on it to give it a chance to run overnight while I slept. Still, it's a solid win, so I won't beat myself up over it too much.