Hi guys, I traded AUDJPY on wed, 9 oct, on daily chart.
Reason for trade:
Trend: downtrend
Area of confluence: support turned resistance (orange rectangle)
Entry trigger: I traded after the bearish candlestick breakout of support level. Open at low of the breakout and stoploss at previous high +1 ATR.
For the next two days, it pulls back to the previous support turned resistance. What do you guys think? Did I enter the trade too early? Should I wait for a rejection at the level and 20ma(green) before entering the trade? Or are there other trading ideas?
I think you’re confusing some details but I overall agree with your trade (I am also short AUD/JPY). I don’t think you entered too early - I entered 23/09.
I think you actually went short on 02/10 not 09/10 (which is next week).
I’m not clear how you’re defining support and resistance. It looks like you entered short below resistance (from July/august) turned support (mid-September), which you hope will resume as resistance again while price has been moving back up towards it the last two days.
Price has risen but the downtrend remains in place and it is nowhere near your SL. Your SL could be located at other levels such as just above the mid-September consolidation highs or just above the September high. But I appreciate you have introduced respect for volatility by using ATR.
Meantime, against other currencies, AUD remains weak and JPY is just getting stronger across the board.
An alternative to this trade would be short EUR/JPY, similar TA reasoning. EUR is not as weak as AUD which is a more risk-on currency but EUR trends can be more consistent, if less powerful in pips. Just a thought.
Did you follow your trading plan? Have you analysed your trades and know over time you are profitable? If so, then just have the confidence to follow it and you’ll make money. If not, then you need to do that before taking live trades otherwise you’ll never know what to do in a trade.