Basic Details Of The Setup
An inside day is observed on 24th September 2019
This pair is considered bearish and at the same time, it is at the latest support level 0.6300. Hence it can play out as a trend continuation pattern or trend reversal pattern. I prefer to trade following the trend in this case but I have to stick to the plan. Whenever there is inside day near the key level, we should let the market decide its natural course.
Details for the mother bar:
Range: 52 pips
This time the difference between the high and the low is only 52 pips. It barely satisfies my pre-determined condition of 50 pips difference for this pair. I have an option of whether I should open a position. And I decided to give it a try.
My affordable loss is $140. So the lot size that I should open will be 140/52 = 2.69 Lot.
As I mentioned above, the inside day is formed near the support level, so I will open 2 pending orders to let the market decide its direction
2 Pending Orders:
Buy Stop 2.69 Lot @ 0.6302, SL: 0.6250, TP: 0.6406
Sell Stop 2.69 Lot @ 0.6250, SL: 0.6302, TP: 0.6146
Progress Of The Orders
Day 1: 24th September 2019
The market has triggered the buy stop order at the very early of the day. I have then closed the sell stop order. It is decided that the market should surge higher. It closed the day with a positive floating profit. The market has broken out the 0.6300 resistance and remained above it. This is a good sign that buyers are in the market again.
Day 2: 25th September 2019
Something has happened today. It has caused the market to reverse and in fact, it dropped a lot. At the early of the day, it was still on the positive side, but this changed when the market closed for the day. The black candlestick showed that sellers have conquered the market today. And I ended up having a negative floating profit.
Day 3: 26th September 2019
An inside day is formed. The price tried to break the 0.6300 resistance but unable to close above it. Even though the candlestick is a bullish one, but it is an inside bar. It means the market is having a short pause for now. We don’t know what is the next direction. Anyway, I am still on the negative side of the coin.
Day 4: 27th September 2019
Another inside bar is formed. This showed that there will be a strong breakout in the next few days. The price is consolidating. The fight between the bull and the bear has a tie. I expect there will be a good movement for tomorrow.
Day 5: 30th September 2019
As expected, the price has moved but it was against my direction. Not only that, it caused the order to be closed. I have lost another trade.
Overview Of The Setup
This is the clearer chart for this whole setup. You can share it with your circle of influence if you like this post.
In this trade, I have lost 52 pips which translated into $139.88
I have to ask myself, was it a good decision to open a trade? My answer is yes. Even though my sentiment for this trade is bearish, but I should follow the plan. And I am glad that I wasn’t influenced by my gut feeling. If that is that case, I would be throwing the whole system out of the window.
But maybe in the future, I should reconsider the range of the mother bar. Maybe a qualifying range of 50 pips is still too small for the trade to have room to breathe. Again, if the market is strongly trending, even a small range has no problem.
I could say that the consolidation of the market has caused the trade to be invalid. If we look at chart 2, you can see that the market has entered the ranging market before it finally closed the trade. Nothing I can do about it.
As long as I am following the system, I have no hard feelings.