The week everything went wrong. We started this week with a 20 pip and 1R loss on USDJPY. The plan was to short at resistance. I waited for price to go past resistance before setting a sell stop at 111.054. A 20 pipp stop loss and 75 pip target gave me a very good risk/reward of 3.75. Price reacted well with resistance and I was about 25 pips up when the USD surged and stopped me out.
A few days later, price raced towards my target before consolidating around there (not shown). Unfortunate to see a mistimed entry but this is the nature of trading and I’ll have to rethink setups like this when I see them again next time. Nevertheless, the risk/reward was enticing enough for me to take it.
Just like the first trade of the week, this loss was unfortunate too. I was looking to buy due to a demand zone and had set a buy limit at 1.30885 with my stop loss below the demand zone. The risk/reward for this was 3.
Price stopped me out before reversing right at my stop loss. The beauty of market psychology is clearly work here. The institutions that move the market know that many retail traders like myself have our stop losses below the demand zone. This gives them an opportunity to push price down into all the stop losses and consume all the orders so that they can buy at a cheaper price. Is there a way to avoid this? Perhaps a very conservative entry. I’ll keep this setup in mind over the next few weeks as reminder of the importance of market psychology.
My third and final setup for the week was a short on AUDJPY. The plan was to sell at the retest of a channel which price was in. I had set a sell limit at 80.468 with my stop loss just above the channel. The risk/reward was decent at 2.2.
Strong AUD data caused the AUD to spike up, filling my order. It consolidated around my stop loss, narrowly missing it just by the spread before eventually stopping me out for a 25 pip and 1R loss. This concludes this week’s review. The week where everything went wrong. I can’t complain though. I’ve had such a good July, a bad week won’t do too much damage to my ROI at the end of the year. Definitely a humbling week and I hope to avoid the same mistakes in the future.
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Case Study: A Textbook Flag Pattern Winner on NZDJPY In this article, we will be sharing our top-down analysis on a bullish flag pattern that