Live Trade Number 5 – ANALYSIS and RESULT

Filed under: Live Trades |

Our live trade alert order on Friday was filled for a sell trade on the GBP/AUD forex pair. I am glad to report that the trade was successful, and we reached our target for a 2% rise on our bank. Before I give you the actual figures and our running profit/loss for this live test, let me take you through the mechanics of the trade.

Figure 1.

 

Figure 1 shows how the trade panned out on the GBP/AUD 1-hour chart. We entered on a 50% retracement of a bearish engulfing pattern, which occurred at a significant area of support/resistance on the daily chart. Our order was filled after a large pin bar following the engulfing candle, and our stop loss was set just a few pips above the high of the move, with a target of two times our risk.

 

Price continued to move in our favor with five consecutive bearish candles and our target was met without any serious challenges to our stop loss. This was a nice trade to be in, and although it might seem tempting to always go for a risk-reward scenario of 1:3 or 1:4, it does not always pay to be greedy. In this case, there was an area of support/resistance coming in on the 1-hour chart at around the 1:2 risk reward area, so I did not want to set a target beyond this. A risk-reward scenario of 1:2 is more than acceptable. However, I would not really go lower than that.

 

Anyway, so the trade was a (another!) success, and here is the official result.

 

Trade 1: Cancelled

Trade 2: -100.48

Trade 3: Cancelled

Trade 4: 199.59

Trade 5: 200.01

 

Total Profit/Loss = +299.12 GBP

 

I’ll be back with another live trade review, or a trade example if we do not get any live trade opportunities, tomorrow. Until then, happy trading.

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