SELL USDJPY: RISING WEDGE ENVELOPED BY FIBONACCI CLUSTER (Closed)

My last trade on USDJPY went wrong. It was the very first trade I took after I got back  from my short break from Forex. Though that pattern looked good, it just didn't work out like I had planned. However, nothing makes revenge sweeter than a set up that looks destined to find its way to fortune.

Rising wedge and Fibonacci retracement - Expansion cluster ( Indigo lines) seemed to converged inside the Fibonacci cluster (green lines -- formed from using two Fibonacci retracement tools). This has all the makings of a fine set up and I earnestly hope it turns out as such.

When price bounced off the indigo lines (and resistant side of the wedge), I went Short at 119.45. Stop Loss was set at 119.74 (30 pips) and Target at 118.23 (120 pips). What informed this decision was that since price recently formed lower lows and lower highs, for the trend to continue, it has to decline lower.

I see nothing stopping it unless Stochastic decides to.

 EVENTUALLY

I never realized squeezing a pip out of USDJPY could be this hard. This is a typical example of a sweet set up (one which was destined for fortune) turned sour.

With price bouncing off the trend line after several reversal bars had formed, I had the impression that a decline was around the corner. However, I felt bad to find out that not only was a decline not to come anytime soon -- it was never to be -- as price bullished high past the trend line, out of the clusters, and stopped me out.

I can not find out (technically) in what way I have wrongly analyzed the market. I  suppose this sweet, well calculated set up designed with an intent for revenge ( and of course for profit) simply back-fired with no explanation whatsoever.

ALSO...

When I thought things could not get any bad than they had already been, they got worse. When the bar that took me out finally closed, I drew a trend line over the highs of the "little" swings and realized that price had simply rallied high to test it (which has a result, took out my stop loss). When price bounced off the line with a long bearish bar, I felt I finally I have my chance, and I hastenly went "Short".

It was a bad call as I eventually figured I took that "Short" on a support. Price formed a doji afterward and rallied even higher past the previous high. I remained calm though, courting the thoughts that the resistant side of the rising wedge would stop the rally. But that was never to be -- Certainly, not this day. I closed my position manually when it became obvious that the resistance (of the wedge) had been broken.

First position Profit/Loss:  - 29 pips

Second position Profit/Loss: -24 pips

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About Moshow

Oseni Moshood ( Moshow) is a physicist, a blogger and a spot trader with years of experience. He trades only price actions partly because he thinks Economics is boring; or, probably because he failed Economics; and he loves fine artistic works.