It's been a quiet week so far. Staying out of the market when it presents few opportunities is challenging. I saw two setups that failed to trigger, which I will elaborate below.
USDJPY
Early this week, an inside bar formed at a perfect position on the USDJPY - at the extreme end of the previous bar, and around a resistance level. The break of the inside bar's high would've signalled a continuation of a bull run. As you can look at the graph, this is precisely what happened.
I attempted to trade this with a pending long on the break of the IB's high, but if you look at the chart, you can see that price fell and broke the IB's low first. This is what actually occured, and once the low was broken, I cancelled my pending long and missed out on the bull run.
A good question would be, why didn't I also enter a pending short as well? After all, an inside bar can go either way as it represents indecision? My feeling is that an inside bar should be traded with regard to its relative position to resistance/support. If most of an inside bar is beyond resistance, then I would regard as a bullish signal. If most of it is below resistance, then it would be better traded as a bearish signal. If it's split 50/50, trade it either way. As you can see on the chart, the inside bar is mostly beyond resistance, hence my inclination to only trade it with a long. It's about stacking probability in your favour.
AUDJPY
I may've made a mistake in trying to trade this pinbar this morning. The other Yen pairs looked bullish so trying to short the AUDJPY may've been a bad idea. Regardless, the high of the pinbar broke mid-afternoon and I cancelled my pending short.
There's another potential pinbar that is forming. I'll keep an eye out tomorrow morning.
USDJPY
Early this week, an inside bar formed at a perfect position on the USDJPY - at the extreme end of the previous bar, and around a resistance level. The break of the inside bar's high would've signalled a continuation of a bull run. As you can look at the graph, this is precisely what happened.
I attempted to trade this with a pending long on the break of the IB's high, but if you look at the chart, you can see that price fell and broke the IB's low first. This is what actually occured, and once the low was broken, I cancelled my pending long and missed out on the bull run.
A good question would be, why didn't I also enter a pending short as well? After all, an inside bar can go either way as it represents indecision? My feeling is that an inside bar should be traded with regard to its relative position to resistance/support. If most of an inside bar is beyond resistance, then I would regard as a bullish signal. If most of it is below resistance, then it would be better traded as a bearish signal. If it's split 50/50, trade it either way. As you can see on the chart, the inside bar is mostly beyond resistance, hence my inclination to only trade it with a long. It's about stacking probability in your favour.
AUDJPY
I may've made a mistake in trying to trade this pinbar this morning. The other Yen pairs looked bullish so trying to short the AUDJPY may've been a bad idea. Regardless, the high of the pinbar broke mid-afternoon and I cancelled my pending short.
There's another potential pinbar that is forming. I'll keep an eye out tomorrow morning.
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