Let us look how the trade proceeded :
By
tymen1 at 2007-08-28
The trade reached a profit point at "wait" but is so small as to be of little value. We wait and the trade goes down again but the "downs" are progressively weaker so our optimism improves. The MACD is going up again.
Let us look even further :
By
tymen1 at 2007-08-28
The MACD reaches a high point at "exit" indicating that the price is as high as it is going to go so we then exit at that point collecting 13 pips.
With a standard lot, that is a fair profit. Note that the 2nd part of our investment was not used - it was not necessary.
Now let us look at the trade from the 20 minute chart :
By
tymen1 at 2007-08-28
Now if I had entered at the bottom of the "candle in question" I would have reaped a profit very rapidly in the next candle. But, as you can see, a profit was made anyway with a longer wait.
The elements that made the trade successful were :
1) The entry near the Bolinger band
2) The pattern was very nearly the 1st half of a morning star doji pattern.
These elements put the odds firmly in our favour even when the entry is poor.
One of the 3 principles of this method was properly used. The other 2 were not properly acted on.
The 13 pips is mine. The commission of 5 pips was paid on the entry - 95.15.
In the next trade I will endevour to use the BB and MACD to better effect to gain a better entry. Also the candlestick pattern needs to be recognized properly and confirmed.
I will now conclude.
Regards, Tymen Wortel, Perth, Western Australia.