Monday, June 24, 2013

Could've traded this better? AUDUSD

This was a trade I performed 15 minutes ago on the AUDUSD 5M chart. I'm still tinkering with confluence trading and recently added pivot points to my tool belt.
A chart of my trade is below. We see a prominent pinbar form within the 38.2% - 61.8% retracement area. It's also touching the daily pivot point, and in the direction of the 200 EMA (grey solid line). Confluence is good.
I entered short and initially aimed for a 3:1 reward:risk, but took profit quite early when the downward movement stalled for a bit. My final R:R was a little over 2:1. Not bad, but as you can see in the chart below, I could've done ALOT better.

My reason for taking profit early was the higher swing low that had formed previously. Since price was stalling at a good potential bullish trend line, I asked myself why risk 3R just to win an extra 1R? So I closed here. It was a conservative play.

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