Live Trade 85 – ANALYSIS and RESULT

Filed under: Live Trades |

Our live trade number 85 has now reached a logical conclusion, so I would like to talk you through the ins and outs of that trade setup right now.

 

Figure 1.

The trade in question came on the NZD/JPY forex currency pair, which is the pair for the New Zealand dollar and the Japanese yen. To begin with, take a look at the daily chart (Figure 1) for this pair. You will see that the pair is in a very strong bull trend, with the 8-day EMA crossed above the 21-day EMA and the chart moving up from left to right. You will also notice that the market recently gapped up, creating a window. These windows often act as good areas of support/resistance, so I was looking out for any trading opportunities in the form of price action signals at this area.

 

Figure 2.

If you now look at Figure 2, you will see that a very nice bullish engulfing pattern emerged right at this level – so I put an order in at the break of the high of the engulfing pattern, with a stop loss just a few pips below the low of the move and a target of two and a half times our risk. As an added precaution, I also set a trailing stop equal to that of our risk.

 

Figure 3.

Figure 3 shows that the trade was successful. However, our trailing stop was hit for a 0.39% rise on our bank. Had we not had the trailing stop, we would have had a 2.5% rise on our bank. This is a typical as we have had a lot of losers recently that could have been winners with the trailing stop. However, a winner is a winner and our equity curve should be much smoother now that we are using these trailing stops. Here are the official results.

 

Trade 85 = +39.36

 

Bank = 9,540 (-4.6%)

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