Live Trade Result – EUR/USD

Filed under: Live Trades |

I took you through a live trade in progress yesterday, which was nicely in profit at the time. Today, I would like to take you through the result of that trade, and discuss some better ways in which we could have managed the trade.

 

Figure 1.

The trade in question came on the EUR/USD pair. If you look at Figure 1, you will see the 4-hour chart for the EUR/USD pair, with our entry candle being the one highlighted in green. What we had done was to put an order in to go short at a 50% retracement of the bearish candle, with a stop loss a few pips above the high of the bearish candle, and a target of two times our risk. The reason for the trade was because price had decisively closed below a significant area of support/resistance.

 

Yesterday, I explained how I had moved my stop to break-even once the trade had moved into profits equal to my risk. However, this proved to be not enough space to let the trade ‘breathe’. Our original stop was almost hit, but the level held; but our breakeven stop was taken out. The trade then moved down further and our target would have been met had we not moved the stop to breakeven for 2% rise on the bank. This is a shame because our original sentiment proved to be the case.

 

You can see now that had we not moved our stop loss to breakeven, we would have had a 2% gain on our bank. By moving our stop loss to breakeven, we ended up with a breakeven trade. However, our original stop was also perilously close to being hit, and it could easily have been a 1% loss on our bank. So did we make the right decision? This is something that I will be looking at in more detail in the second article today, entitled  – “How to Manage a Trade?”.

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