5% Risk

Reasons for entry:

• SELL limit because of the downtrend, higher confidence because trading in trend direction is more desirable.
• Using a combination of support lines, fibo lines AND the number of pips difference in the last swing low to swing high (about 88 pips) I made a calculated guess at the resistance level
• Price looked like it was hitting support and bouncing up a little, with this in mind I figured a sell limit ahead of time near a possible resistance might be a viable entry point

Reasons to not enter:

• RSI is still showing divergence (higher lows despite price making lower lows), taking this to account the TP is simply the low of the previous day and does not exceed it thereby appearing to play it safe while still in a downtrend

Overall sentiment

Overall since its a downtrend it made sense to stick to doing sell orders. The downtrend looks like its slowing down but this isn’t enough to have confident buy orders. I feel that at the very least some sort of double bottom to the downtrend will form which will reap profits even if the trend is slowing down

Confidence level at start of trade: 8

Confidence level during trade: 8.5

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**POST TRADE COMPLETION**

Result: Take profit hit

What went right?

• Trading with the trend
• Waited it out, patience is key, the trade took almost 2 trading days but because of the weekend had been active for a few days
• Very accurate entry point, the combo of resistance lines, fibo lines and comparing pip difference of the last swing high to low gave a very nice and low risk entry point
• Wider SL and TP point as a result of the above point

What could have been improved?

• Got a little impatient and lowered the TP slightly because it had almost hit it before but was retracting, lowered only by about 2 pips though, however I could have been even more patient

4% Risk

Reasons for entry:

• Resistance to the down trend appears to be forming with the RSI showing slight divergence
• Price appears to be bouncing off a support line, forming a sort of double bottom and unable to break the previous day’s low

Overall sentiment

I feel that there will be a slight bullish movement, maybe not enough for a complete trend reversal but strong enough to maybe get some pips, in the few days before this I wouldn’t have bought since there was a strong downtrend however there seems to some resistance now to be open to both ways

Confidence level at start of trade: 7.2

Confidence level during trade: 7

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**POST TRADE COMPLETION**

Result: Stop Loss hit

What went wrong?

• Downtrend was already happening, ignored heiken ashi strong trend and clear downtrend indicator
• Reversal signals weren’t strong enough, there really wasn’t a reversal signal at all apart from a minor fibo support line (not an actual drawn one), a very slight RSI divergence and some minor price action signs of reversal. The reversal might be showing fruition but is also too early.
• More volume than expected which suddenly pushed the price down not even hours after opening, news appears clear overall. Time was close to NY close.

What could have been improved

• Having the confidence to actually place a limit order slightly below the support line instead of going in to an immediate entry order which was above the support line because I thought the price might not go down enough bounce. Place a limit order slightly below the supposed support line or new high/low and stick to it. As a result of ignoring this the price reached close to the stop loss.
• Follow the trend if it makes sense, stick to placing limit orders, e.g a sell limit at a resistance line instead of trying to anticipate a reversal
• Widening SL+TP for a trend, the SL was about 23 pips with a TP of 46, so far it seems that most of the winning trades can stretch out for more TP and a wider SL especially during a trend. It also helps to place limit order a little above/below the support/resistance line AND have the TP a little beyond the target s/r line (essentially anticipating possible wide moves).
• Fibo lines can be distracting, though they are needed and work with the trend quite well but they can create a bit of a mess, perhaps have a seperate fibo chart or lessen their visbility while keeping prominence to support lines (and their relative strength i.e a strong s/r line could be bolder)
• Ignore what the market thinks, i.e ignore sentiment on myfxbook just stick to the system.
• Listen to the 1D chart as well and refer to the checklist
• Make more of a checklist

Possible checklist ideas:

• If there’s a trend then try to base trades on direction i.e on a downtrend try to focus on sell limits
• For limit order conditions and reason to actually enter the trade refer to (example sell limit):
  • Whether price is hitting the SMA 12 from underneath it (i.e price goes up and hits the SMA 12)
  • Possible resistance lines

Constructing a chart:

• Refer to course checklist but also, when constructing s/r lines, more recent ones are more reliable and should be used as the anchor point