Live Trade Number 6 – ANALYSIS AND RESULT

Filed under: Live Trades |

Our live trade number 6 on the GBP/AUD forex currency pair unfortunately did not quite come off yesterday. Let me take you through the trade.

 

Figure 1.

If you look at Figure 1, you will see our entry. We set a sell limit order at a 50% retracement of a pin bar. This pin bar formed after a nice move up, and it formed at a very significant area of support/resistance on the daily chart, which I have marked in with a green band. When a nicely formed pin bar forms at a level such as this, we have to sit up and notice. What made the trade stronger was that this level had already been tested and rejected very recently, which you can see on this chart. Our order was set with a stop loss just a few pips above the high of the move (including a little for the spread), and our target was three times our risk, so that is a risk-reward scenario of 1:3. I was quite happy to go ahead with this setup, as there was a confluence of signals – and I still am happy with it, despite the result because all the right decisions were made.

 

Figure 2.

As you can see from Figure 2, our order was filled, but price moved just a little bit too high and hit our stop loss before moving downwards. We can consider ourselves unlucky on this one, as price did move in the direction that we anticipated. This happens from time to time and it is a part of the process of trading, so we must try not to feel anything about it. For the record, here are the results:

 

Trade 1: Cancelled

Trade 2: -100.48

Trade 3: Cancelled

Trade 4: 199.59

Trade 5: 200.01

Trade 6: -99.46

 

Total Profit/Loss = +199.66 GBP

 

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