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AUD/USD 4 November 2019

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Basic Details Of The Setup

I have spotted an inside bar on 4th November 2019.

Chart 1

This setup is the first setup since I revise the Penguin Inside Day System. I have added EMA20 as the trend indicator and ATR (14) as the trade filter.

The overall trend for AUD/USD is currently bullish. It has just broken up its nearest resistance level recently (I did not show it on chart 1).

The mother bar details:

High: 0.6931

Low: 0.6885

Range: 46 pips

I am using ATR (14) as the trade filter. The value of the ATR (14) in the past 2 weeks are:

High: 51 pips

Low: 42 pips

So the trade is valid because the mother bar size (46pips) is within the range of 42 pips and 51 pips.

Now I am using EMA 20 as the trend indicators. If the inside bar forms above the EMA 20, I will set a buy stop order and vice versa.

In our case, the inside bar is above EMA 20.

So it is a buy stop order. The lot size of the trade is $140/46pips = 3.04 lot.

The pending order:

Buy Stop 3.04 lot @ 0.6931, SL: 0.6885, TP: 0.7023

Progress Of The Orders

Chart 2

Day 1: 4th November 2019

My pending order is not triggered. Instead, it went actually south. It feels that the market is in a temporary ranging market.

Day 2: 5th November 2019

The buy stop order is hit not because the price reached the 0.6931, but because of the spread of 3 pips, the order is triggered when the price is at 0.6931. I think I should try using the account with zero spread but with commission. The entry point is more accurate. Anyway, this position went south after it is opened. It ended in a pretty quick loss. Bad trade.

Overview Of The Setup

Check this out. I have cropped off the unnecessary area of the chart.

4 Nov 2019 AU Full Story


4 Nov 2019 AU Result

I am not sure what I am learning here. The trade went wrong too quickly. It gave me not enough time to experience anything. Perhaps there is one thing I can consider. It is the distance of the price with the EMA. I do not want to assume anything yet. It is just an observation. If the distance between the EMA 20 and the inside bar is big, there is a possibility for the trade to not work unless it is in a very strong trend.

We know that EMA is a trend indicator which also is an average indicator. It shows the average price of the currency pair in a given amount of time. It is logical for price to move back to the EMA if the gap is big. Unless the trend is very strong.

I will keep it as an observation for now.

Talk to you soon.


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