Basic Details Of The Setup
I spotted an inside bar on the 15th of October 2019.
EUR/USD is long term bearish. From the weekly chart, I can see that the direction of this pair is towards the south. Please refer to chart 2.
The detail of the mother candle:
Range: 62 pips ( This is a good range for EUR/USD)
Because this pair is strongly bearish and formed in any nearest support or resistance level, I will set a sell stop order only.
Lot Size: $140/62 pips = 2.25 Lot
The order is the following:
Sell Stop 2.25 Lot @ 1.1001, Stop Loss: 1.1063, Take Profit: 1.0877
Progress Of The Orders
Day 1: 15th October 2019
The price went south to trigger the sell stop order. It did not continue its move downwards but there was a sudden move upward. The price closed around 1.1032. This order suffered 50% of the stop loss. Hopefully, it is only temporary.
Day 2: 16th October 2019
A loss. This is the fastest trade I have ever experienced from this experiment so far. If you look closely at the chart 3, you might ask why is it a loss because the price has not touched the stop loss level. It is because of the 3 pips spread. The asking price has reached our stop loss level. It is funny that after hitting my stop loss level, the price went back to 1.1036. It is very unfortunate.
Overview Of The Setup
This is a better image of the trade. You can share it with your friends.
I have lost 62 pips which is equivalent to 139.5 USD
I did not know what has happened to the EUR/USD which has caused it to have a sudden move against my direction. However, it is still within my expectations. In the forex, the worst thing can happen to us is to have a losing position. But if it is a calculated risk, it will not do a lot of harm to the account.
It does not matter how beautiful is the setup, there can be a lot of unpredictable incidents. I am enjoying doing this journal so far, I hope that you enjoy reading it as well.
Wishing you a good day ahead.