Losing trade on the USDJPY

This was a trade I lost not long ago on the USDJPY, using the 5M chart.

I think I forced this trade. The confluence was weak. My candle entry signal occurred just outside the major 38.2% - 61.8% retracement area, and the candle itself wasn't prominent.

However, as you can see on the left side of the chart, there was sharp, convincing downward movement just prior. The upward retracement looked weak and indecisive. Plus, at my point of entry, I was getting a R:R of 3.5:1. I only needed a win-rate of a little less than 33% to breakeven.

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.

Fibonacci retracements - another tool in the belt

I've been spending the last week practising Fibonacci retracements. I've ignored Fibonacci levels and Elliot Wave theory, thinking they were too subjective to use, but I've been surprised by how well Fibs are respected when used in conjunction with other technical tools like trend lines, support / resistance and candlestick patterns.

 

This was a trade I did not long ago on the USDCHF 5M chart. I plotted the Fib retracement levels from the most recent major swing low and swing high. From my own observations, you'll very likely see the end of a retracement, and resumption of the trend, within the 61.8% and 31.2% levels.

 

I also saw that a resistance level had previously been formed around 0.92700. The 200EMA showed a bullish bias. The bullish candle that formed after price touched resistance & Fib levels told me that price was ready to move up. This confluence of technical factors indicated a good opportunity to go long.

 

I took profit as price reached the previous swing high and began slowing down. All the while I was trailing my stop loss, moving it to breakeven once price was halfway towards my profit target. This is a type of trade that either succeeds, or you get out quickly at minimal cost. We're not hanging around for a second retracement of a similar magnitude as the first, as this would mean the trend is breaking and our chances of finishing in profit is diminished greatly.

 

Below is a snapshot of my trade. You might have to click on it to zoom in.

 

 

A very good trade on the CADCHF today...

This is the original setup that I posted on Sunday night, with an inclination to go long on the break of the engulfing bar. I predicted continued bullish action from support at 0.9000.

My long was triggered yesterday and price moved in my favour for a bit, until it reversed and closed as a pinbar reversal signal.

 

The "old me" would've kept the order open until my stop loss was hit, just below 0.9000. I then thought about it.

 

The pinbar formed along a trendline, as well within the 38.2-61.8% Fibonacci retracement level. The momentum of the last few weeks was also very bearish. To me, the probability of a successful trade became diminished. If 0.9000 was to be re-tested so soon, then it told me that institutional money was determined to break it.  

Rather than wait for my stop loss to get hit, I saw an opportunity to cut my trade at a very cheap price, which I did. I then decided to trade the reversal.

 

I felt if institutional money was going to re-test 0.9000, it wasn't going to waste time. Rather than set my stop loss at the top of the pinbar, I moved it a bit lower in order to provide a 2:1 reward-to-risk ratio. I set my profit target a little above 0.9000. The trade closed in profit a short awhile ago so I'm pretty happy about how I traded this.

Upcoming signal: CADCHF

Only saw one signal over the weekend that I like. The CADCHF has been ranging between 0.9000 and 0.9500 since the start of the year. An engulfing bar has appeared at a solid, well-respected support level of 0.9000. Other CAD pairs show highly-correlated candles.