Archive for the ‘Trading Journal’ Category

Observation :

• For the past 5 months, GBPUSD seems to be consolidating and stuck in a range on the Daily Charts.
• And within this range, price seems to be exhibiting quite regular oscillations up and down this range on the Hourly and 30 Minutes Charts.
• On the 30th Nov, I noticed a typical “Head & Shoulders” forming on the 30 Minutes Chart.
• As I am not a huge fan of trading within ranges, thought I might just paper trade on this one using the trade setup I learned from Ed Ponsi’s seminar.

Possible Setup :

• Wait for price to dip below 10% of the neckline before going short for a profit target equal to the left shoulder.

Technical Analysis / Indicators :

• At the region of entry, RSI is gradually oscillating downwards, heading south towards the 20 mark line, still got room to drop some more in my opinion.
• MACD line has just dipped below the zero line after coming down from a huge up move and signal line is following suit.

Entry Point :

• Entered short at 1.6466 with 1 standard lot. ( Green Line )
• EP is 10% of the height of the pattern, which is about 12 pips below neckline.

Stop Loss  :

• Set initial stop loss at 1.6504.( Red Line )
• SL is 25% of the height of the pattern, which is about 28 pips above the neckline.

Profit Target  :

• Set initial profit target at 1.6384.  ( Blue Line )
• PT is height of the left shoulder of the pattern, which is about 82 pips.

Conclusion :

• Price just hit my profit target but barely.

What I Learned From This Trade :

• Perhaps in the faster 30 minutes chart, instead of setting the profit target to 100% of the height of the left shoulder of the pattern, we should limit it to maybe 80% just for safety reasons.
• Although the trade was successful, I didn’t regret not making it a “Live” one as I’m still not that comfortable trading within ranges.
• And with the faster charts, prices might just give me a big heart-attack  if I watch the charts move on this one, lucky I off my PC and read a book instead.