Here’s my first trade. I know it’s a little messy, I have to work on making things easier for others to understand.
Date: January 2, 2020
Size: 1 micro lot/ 1,000 units.
Indicators: MACD, RSI, and Stochastic. All on default presets.
Timeframes: 1D, 1H, 5M
Plan: Drawing lines to establish support/resistance zones, and using indicators to help decide whether to sell, buy, or walk away. Entering a trade only with enough confirmation and room for profit. Risk/reward ratio should be at least 1:2.
Looking at the 1D chart:
RSI at 51, heading down fast - sell signal
Stochastic going down from overbought - sell signal
MACD about to converge and head downwards - sell signal
Price is going down from a new recent high, a reversal could be in play.
There’s a well-defined support zone, that’s a potential take-profit target.
I drew more support/resistance lines to visualize other points of entry/exit.
Looking at the 1H chart:
All indicators here say buy, price is at a recent lowest point.
I could only identify one resistance zone, a potentially better entry. But it would take time to get there. I decide to get in now. I ended up trading the 1D chart. It felt like a safer trade.
Looking at the 5M chart:
Indicators were not much help. Price is ranging.
I drew lines, there was room for a better entry. I waited for the price to go up only one level before opening my position.
After getting in, I set my stop-loss above the 1H chart resistance level. It would prove my idea wrong in the short-term, and despite trading the 1D chart, I wanted the trade to close the same day. Looking back, I think that was not a good idea.
I set a take-profit on the 1D chart’s next support level. I wanted to close only half my position and let the other half run for the next support, but my position was too small to close half. I left, checked periodically. Later price did bounce within expectations, so there was a better entry, after all. My take-profit got filled early the next day. Profits were about 40.3 pips after taking out the 2.5 pip spread.
My takeaway from the trade is that there were some mistakes. There’s room for improvement. I wanted the trade to open and close fast which is not what happened, that ended up being a swing trade. I thought there would be a lot more noise on the 5M chart but it was surprisingly workable. I’m still not sure what to make of the discrepancy between the 1D and 1H charts with my execution of the trade. And this trade was completely based on technicals. I shouldn’t rely on just that, I think.
Any feedback is welcome!
EDIT: I think I should probably discard the Bollinger bands since I don’t use them, or maybe am using them incorrectly. Also RSI and Stochastic are somewhat redundant in my opinion. Well, it doesn’t hurt to have extra indicators.