Hey all!
A bit of a background on this trade, since I decided to share this journey a few days into the challenge, this trade has already been closed, it was my first opportunity to do things better through the challenge as I made some mistakes I was able to identify when I reviewed the trade once it stopped out. Enjoy!
Entry
Trade Description
After the pandemic, the pair has behaved on a wide range visible from the daily timeframe. The last bullish impulse defined a HH HL structure which broke when the market reached the resistance area that came from 2019.
It spent the last trading week attempting to break the resistance with strong rejection, suggesting the presence of supply. When zooming in to the H4 timeframe, recent price action suggests that the sellers have the upper hand as recent bearish movements are strong with closes near the lows, and even printing a bearish engulfing candle pattern.
However, the RR of the entry from H4 isn’t too favorable, which lead to evaluating H1 as well, which helped find a local uptrend that broke and was retested, allowing for a good SL placement 1 ATR above the local high on H1, enabling a 5R TP1 on the macro movement.
However, since we are trading a macro movement from a relatively micro time-frame, we could get stopped out on a wick from H4 or the daily timeframe, making a high-risk high reward setup, especially considering the small consolidation area on H4, on which its resistance could act as a support, so early closure will be considered for this trade.
TP1 is set to the bottom of the previous consolidation range, an early close at the top of this range will be considered depending on price action. TP2 is open with a trailing stop loss.
Notes from my journal
Went out of my trading plan searching for a valid confirmation on H1 because of FOMO. The market retraced enough to stop me out while the overall setup is still valid. It will remain as a phase-2 trade.
Context about phases, I organize my trading set-up tracking system in phases:
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Phase 1: Potential setups but not actionable opportunities.
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Phase 2: Clear set ups that are just waiting for confirmation to execute a trade.
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Phase 3: Running set ups.