Live Trade Update – USD/CHF

Filed under: Live Trades |

I discussed a live trade that I had in on the USD/CHF forex currency pair a couple of days ago, and I’m afraid I have done something rather silly. For some inexplicable reason, I moved my target to breakeven. Yes – sometimes traders do odd things; and then we have to analyse why so that it doesn’t happen again.

 

Figure 1.

Figure 1.

If you look at Figure 1, you will be reminded of the trade in question. The highlighted bearish pin bar was our signal to go short, with an order at a 50% retracement of this pin bar, with a stop loss just a few pips above the high of the pin bar, and a target of four times the risk. This pin bar was rejecting a very nice short-term level of support/resistance, and this order was filled very nicely.

 

After the first day, a small bullish candle formed. However, this was no big deal, as it created a lower high (something that we look for), and a slight upper shadow. However, the next day, price continued to move up a little, and at this point, I suppose I lost my nerve, and decided that, if price made it back to my entry point, that I would want out. So, I moved my target to breakeven.

 

At the moment, I am really kicking myself for this decision. Price has since capitulated downwards as we hoped, and we would now be in profits of around three times the risk, and at this point we could have moved the stop loss to breakeven and have been in a risk-free trade. The level of support/resistance held very well indeed, and this is working out just as we wanted it. Unfortunately, I lost my nerve. When putting an order in such as this – there are a couple of things you can do. One is to not meddling in it at all in a ‘set and forget’ type trade. Another is to manage the trade based on what price action is telling you. I’m afraid that I broke my own rules here and did neither. This will not happen again.

 

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