The Daily Trade – Day 78

Filed under: Learn Forex Trading |

Trade Number 78 – AUD/JPY 4-Hour Chart, USD/CAD 4-Hour Chart, EUR/GBP 1-Hour Chart

For today’s daily trade, I am going to show you that not all trades are successful. In fact, about 50% of my trades fail and it is the positive risk-reward setup that keeps me profitable. I’ve had a run of failed trades this week, which is something that we have to expect from time to time. Our equity curve cannot go up in a straight line, and we just have to monitor our maximum drawdown to make sure that nothing unusual is happening.

 

Figure 1.

Figure 1 shows the AUD/JPY 4-hour chart. There was a nice positive bullish engulfing candle following a pin bar at support. I got in on a long trade here with a stop loss a few pips below the low of the move. This one did not work out.

 

Figure 2.

Figure 2 shows the USD/CAD 4-hour chart. This time, there was a very long and strong bearish engulfing candle at our area of resistance so I took a short trade here with a stop loss just above the high of the engulfing candle. This did not work out either. In hindsight, my stop should have been above the high of the move, but I was reluctant to do this, as it would have limited my risk-reward to less than 1:2. Therefore, I should not have taken this trade. This is a case of over-trading, which is something we all have to keep an eye on.

 

Figure 3 shows the 4-hour chart for the EUR/GBP pair. As you can see, there was a very strong bearish engulfing pattern that formed at the green zone, and I got in on a short trade with a stop loss a few pips above the high of the move. Unfortunately, a big pin bar stopped me out! So as you can see, not every trade is successful. And the lesson… if you want to win, ultimately, you have to learn to lose!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>