Trade Opportunity Missed! (USD/JPY)

Filed under: Learn Forex Trading |

On Wednesday night, there were two possible trades setting up that I could see, and after deliberating over the both of them I decided to take one and leave one alone. For the one that I took, my order was not even filled – and for the one that I left alone, well, I am left firmly kicking myself this morning.

 

Figure 1.

Figure 1.

If you take a look at Figure 1, you will see the trade setup in question. This is a setup on the daily chart of the USD/JPY pair (the pair for the United States dollar and the Japanese yen), and the key moment in question was the close of the small pin bar (highlighted in green) in a bull trend. There were two reasons that I decided not to take this trade – first, there was the fact that the pin bar was quite small; and second, there was an area of support/resistance coming into play at the top of the chart.

 

I had considered two possible entries. Firstly, there was a 50% retracement entry, but I decided that this would have made the stop too tight. The second was to enter at the break of the high of the pin bar, but this would have left an unsatisfactory risk-reward scenario given the area of support/resistance very close by.

 

Had I been brave and entered at a 50% retracement of the pin bar, we would now be in profit to a massive, massive, NINE times the risk. I am honestly now gutted that I did not take this trade, as I was very close to pulling the trigger on this one. That really is a massive risk-reward scenario, and there could be a good deal to go on this one as well, as it still looks very bullish. Gutted.

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