I don't really have a creative title for this post. It's largely to go over some of my more notable trades this week. Took a few losses and then recovered through my trades on gold. Execution quality is still my main priority.
I do look forward to this month's trade recap. It's my first positive month in quite a while with a 1.25 profit factor. A proper trade recap will come in a follow up post over the next few days. Let's go over a few trades for now.
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| Gold 4-Hour |
I think I did a good job with this range play. Pretty standard I'd say where price drifted to the lower boundary and held above it. It gave no indication of breaking lower. Since it is held supported, I entered long. Luckily, I didn't have to wait long for the momentum to pick up.
What I also did well was not be too fearful of returning back profits. I targeted the upper boundary and watched the price action. Since there weren't any major signs of exhaustion or price reversal, I held my long position to the upper boundary.
On a lower timeframe, price hit the upper boundary and then made a lower high. I reversed the trade and went short with a Fakeout play. Here's a look over on the hourly timeframe.
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| Gold 1-Hour |
Since both of these traders were under 3R each, managing this trade would've been important. If I couldn't catch the momentum, then it would've been necessary for me to scratch at breakeven or at a small loss.
This next trade occurred last week, which I did post about. I'm going to post about it again because I annotated it slightly differently. In this image below, I used the Long Position drawing tool just to show my relative risk and reward.
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| GBPCHF 1-Hour |
I've been targeting lower R's and this one is no different. GBPCHF had a payoff of just slightly over 3R. It could've been more if I had a tighter stop loss. The reason I don't is because I started using ATR based stop losses. I now set my stop loss to 50% of the daily ATR. The idea here is that the signal fails when price moves over 50% in the opposite direction. 50% would indicate a majority move, which then means that my trade is effectively going against the trend. By targeting lower R multiples now, I do need to be careful with my entries to ensure that I'm able to sustain a higher win rate.
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| EURNZD 1-Hour |
This was an actively managed trade. Price made an upper boundary and failed to push higher. The second push failed as well so this was a continuation failure. After shorting this pair, it made a bounce. This was fine since it's simply not feasible to expect to drop straight down. However, this bounce did provide a level to watch out for. When price threatened to cross back above this level, I got out. When price crossed above, this was an indication that price won't be making another continuation move lower.
Finally, I took an L on this. I spotted a Breakout Continuation signal over on AUDUSD. I went long and it didn't work out. Let's first take a look at the structural move.
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| AUDUSD 4-Hour |
Yellow arrows show when I trade a breakout continuation. I find that this tends to be a bit more successful when there is a structural reversal. Price was trading in a downtrend and then bottomed out. Price breached above the upper boundary and held. This is where I entered. What I didn't anticipate was a slightly higher hourly level being held up.
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| AUDUSD 1-Hour |
Price actually held resisted at the 0.7402 level. If I plotted this level, my directional bias based on the hourly level would've been to short. However, the 4-hour would've still indicated further upside potential. In this situation, I would've still gone with my long position. One thing I would've done differently would've been to reduce size. This is for two reasons.
The first reason is the hourly resistance. Since price held resisted, momentum will pick up once price breaches this level to the upside. This didn't occur at the time of my entry so reducing position size would've been the optimal play.
The second reason ties into my previous post - decay. After price breached above this level, it sort of hovered when I entered. The ideal pattern would've been a downward drift to this level and then a large bullish bar. There has been a bit of signal decay since price made a smaller range above this level, which means momentum isn't fully there yet. It's taking time to develop and that is an indication that there isn't a sense of urgency.
