Today is the first day I went live with my forex account!
After spending the last couple of months attending seminars, reading books, watching videos and trading on my demo account, I finally took the plunge and made my first trade with REAL money!
So what's my very first real money trade in forex?
USDJPY
Trade: Long: 90.17, Take Profit: 90.51, Stop Loss: 90.04
Executed Long 90:17, 20 Oct 2009, 2:22pm (GMT +8)
Executed Sell 90:51, 20 Oct 7:06pm
Profit 34 pips!!
Wahoo!! A profitable first trade!! And hopefully many more to come! :)
So what was my thinking behind this trade?
As you can see from the chart, USDJPY is in a downtrend trading along a very nice channel formed by two parallel trendlines in yellow. When the price touched the lower trendline at around 12-1230pm, I was wondering if the trendline will hold. In fact it penetrated the trendline but closed above it. In the next candlestick, it also penetrated it but closed above it as well. Hmm... looks like the trendline may hold. Shall I go Long here to try to catch the rebound up? I will need something else to help me make that decision.
Now do you notice the Cyan trendline that is moving up? I drew this trendline when I was looking at the 3 hour interval chart below:
When you step back and look at the bigger picture, you will notice that the USDJPY was in a long downtrend and only began turning up around Oct 8th and 9th. It finally confirmed an uptrend by forming a higher high and a higher low. And I drew a support trendline linking the 2 lows in Cyan.
So when looking back at my 30 min chart, I realised that my downtrend in Yellow was in fact a tracement of an established uptrend since Oct 8th. That gave me the confidence that there is a pretty high probability that the USDJPY will indeed bounce off the Yellow trendline, when in fact it will also be bouncing off the Cyan trendline too.
Ok, so far I am quite confident to go Long at this point..... but what if I am wrong? What if the price continues down? After all, the 3 EMAs that I have put on the 30min chart shows a very strong downtrend right?
Hmm so what does my other indicators say? The MACD is sloping down, to be expected since my EMAs are all down too. However the Slow Stochastic and RSI are both indicating an over-sold position.... hmm, so it may indeed bounce up!
Ok, I decide to take the plunge and go long at 90.17! Why 90.17? It was the close of the last candlestick and I didn't want to place a price too close to the trendline or I may miss getting into a position when the price runs away from me. Now to protect myself, I place a Stop Loss below the Yellow trendline at 90.04, just in case I am wrong and there is no bounce. Worst case, I lose 13 pips.
Now how much profit to take? From the top Yellow trend line, a good Exit looks to be around 90.51, not too close to the trendline just in case it does not reach it, profit of 34 pips, not bad, almost 1:2 risk:reward :)
After placing the trade and establishing the Stop Loss and Take Profit orders, its time to sit back and let the trade run its course.
Now why is it that immediately after you have placed a trade, the price always moves against you?? There were a few heart stopping moments when the price went down to 91.07 :)
Well, that's my first trade folks! Now I wonder what a professional trader will say about my trading process?...
Happy Trading!
So when looking back at my 30 min chart, I realised that my downtrend in Yellow was in fact a tracement of an established uptrend since Oct 8th. That gave me the confidence that there is a pretty high probability that the USDJPY will indeed bounce off the Yellow trendline, when in fact it will also be bouncing off the Cyan trendline too.
Ok, so far I am quite confident to go Long at this point..... but what if I am wrong? What if the price continues down? After all, the 3 EMAs that I have put on the 30min chart shows a very strong downtrend right?
Hmm so what does my other indicators say? The MACD is sloping down, to be expected since my EMAs are all down too. However the Slow Stochastic and RSI are both indicating an over-sold position.... hmm, so it may indeed bounce up!
Ok, I decide to take the plunge and go long at 90.17! Why 90.17? It was the close of the last candlestick and I didn't want to place a price too close to the trendline or I may miss getting into a position when the price runs away from me. Now to protect myself, I place a Stop Loss below the Yellow trendline at 90.04, just in case I am wrong and there is no bounce. Worst case, I lose 13 pips.
Now how much profit to take? From the top Yellow trend line, a good Exit looks to be around 90.51, not too close to the trendline just in case it does not reach it, profit of 34 pips, not bad, almost 1:2 risk:reward :)
After placing the trade and establishing the Stop Loss and Take Profit orders, its time to sit back and let the trade run its course.
Now why is it that immediately after you have placed a trade, the price always moves against you?? There were a few heart stopping moments when the price went down to 91.07 :)
Well, that's my first trade folks! Now I wonder what a professional trader will say about my trading process?...
Happy Trading!
No comments:
Post a Comment