What a way to start the week! I left this position opened over the weekend and it was worth it. I had resolved to follow the trend and boy did it yield profit - + 100 pips. It may be too early to say but waiting for sub-patterns has help me a lot - in avoiding fakeouts and entering trades with precisions. In the past, I would have jumped into this trade soon after price bounced off the resistant side of the demand channel (upside of blue line); but, I knew better to wait for a sub-pattern which also was a channel (note red lines) - from where I boarded a joyful sail to profit!
On 4-hour time frame, overall, it's a downtrend. I have recently resolved to always follow the trend in trending markets; so, I spotted a demand channel.
On 1-hour time frame, a slender, rising channel formed. Price traded outside the blue channel (from 4hr) only to reach for the confluence between a trend line (which I drew soon after price traded outside the blue channel) and resistant side of the red channel - as a result, Shooting Star formed. I went "Short" at 1.0725 when price bounced off the resistance, set Stop Loss at 1.0768 (43 pips - above the most recent swing high), and Target was set at 1.0583 (142 pips - below the most recent swing low on 4hour).
EVENTUALLY
Price broke out of the red channel, and broke the upside of the channel - and bullish divergence formed (note line on Stochastic). In the light of this, I wanted to exit my position but since price was so close to a former support which may turn resistance, I waited. A few bars after price declined further.
Market closed, opened, and the decline resumed. I exited at 1.0625 in accordance to my Exit Rule after Market Structure Low formed.
Profit/Loss: + 100 pips
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