On 4HR, an MSL (Market Structure low) had just bounced off the support part of the channel before I spotted it. I feel uncomfortable setting an SL(stop loss) of about 50 pips for a potential profit of a little over 100 pips -- it just doesn't meet my liking -- So, I'm setting a pending order.
Not just for the above mentioned reason though. The stoch is perhaps aiming to form a bearish divergence on 1HR which could potentially push down price towards my entry. So, I have set my entry a few pips away from current price.
If it all goes well, Risk would be 40 pips while Target(other side of the channel) will be 120 pips. That is about 1:3 risk to reward ratio.
Since the entire pattern is a bearish flag(while the prior trend before the channel is its pole), I intend to go short if price bounces off the channel after hitting my target.
EVENTUALLY:
Price pulled back for a test on the channel and picked up my pending order --I was in. I had thought it would rally soon after but no, it didn't.
I went back to 1HR to check on what it was doing and I realized it formed a triangle just close to the support part of the channel.
I was calm. I knew I had two supports that could possibly stop price from going agaisnt me -- the triangle from 1HR and the channel from 4HR.
Price rallied. Broke out of the triangle and headed for my target.
until at 95.93, which is +55 pips away from my entry, where I exited. A bearish divergence prompted me against holding on to the trade until it gets to the other side of the channel like I had planned.
One of my exit strategies is the formation of negative divergence i.e divergence which signal opposes the direction in which my trade is heading towards;though it took some time and a lot of profits which ran into losses to resolve that WHENEVER a negative divergence forms on 1HR, I exit that position.
Divergence formed. I knew it was heading down but none of my patterns could complement the bearish divergence, I closed shop on +55 pips and let it go.As it turned out, it did turn and also it turned really fast.
As I exited I echoed these words: It's not enough to have a good entry, you have to have a good exit. Somewhat, in this trade, though it didn't get to my target, I make do with another exit tool.
PROFIT/LOSS: +55 pips
0 comments:
Post a Comment