Live Trade 117 – Analysis and Result

Filed under: Live Trades |

Our live trade number 117 came to a logical conclusion this morning; and unfortunately, it wasn’t the result that we were looking for. However, we have to report and analyze the good trades and the bad, so here goes.

 

Figure 1.

The trade in question came of the USD/JPY forex currency pair, which is the pair for the United States dollar and the Japanese yen. To begin with, take a look at Figure 1. This is the daily chart for the USD/JPY pair and this is the chart that we look at to assess the dominant trend. As you can see, the chart moves down from left to right, suggesting that it is bearish. The 8-day exponential moving average is also crossed below the 21-day exponential moving average, which confirms this bearish momentum. In this kind of market, we want to be trading in the direction of the dominant momentum, so we are only really looking for short trades that are confirmed by price action signals.

 

Figure 2.

Figure 2 shows the 4-hour chart for the same USD/JPY pair. As you can see, there is a nice area of support/resistance at the bottom of the chart, which I have marked in with a thin red horizontal line. Figure 3 shows that price bounced off of this line with a pin bar (highlighted in yellow). We went short at a 50% retracement of this pin bar, with a stop loss placed just a few pips above the high of the move, and a target of two times our risk. However, as you can see, on this occasion, this trade was not successful and our stop loss was hit for a 1.04% loss on our bank. Well, that’s it for today, and I’ll be back with more tomorrow…

RESULT

Trade 117 = -104.26 GBP

Bank = 9,497 (-5.03%)

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