Live Trade Result – AUD/JPY

Filed under: Live Trades |

The trade that I discussed on the AUD/JPY forex currency pair (the pair for the Australian dollar and the Japanese yen) last week has now finished, and it is another loser I’m afraid for a 1% loss on the bank. What we must do is see these losers as one trade in the next one thousand trades – and by doing that, it becomes more insignificant.

 

Figure 1.

Figure 1.

Let me talk you through how this trade failed. Take a look at Figure 1. This is the daily chart for the AUD/JPY pair. The pair had recently gained some bearish momentum with that long bearish candle, and the 8-day exponential moving average crossed below the 21-day exponential moving average, confirming this bearish momentum. I was on the lookout for any bearish price action signals at a significant level of support/resistance, so when a nice bearish pin bar formed just two sessions after a rejection of this area with a long tailed doji-like candle, I felt that this was a good place to put an order in. I put an order in to go short at a 50% retracement of the pin bar; with a stop loss placed just a few pips above the high of the pin bar, and a target of three times the risk. This stop loss also happened to be above a 50% Fibonacci retracement area, so this added some strength and put the law of probability on our side.

 

However, unfortunately, our stop loss has been hit for a 1% loss on the bank. Looking back at this in retrospect, there were also some long tails rejecting lower prices as well, and this may well have been a warning sign that the market might not move lower again. It wasn’t the best setup in the world by any means, but it was one that I thought warranted a trade.

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