Day Trade Journal – Day 14- June 15, 2023
TRADE #1 OVERVIEW
Forex (Oanda-MT4)
PAIR: EUR/USD
LONG/SHORT: SHORT
LOT SIZE: 0.2
ENTRY: 1.08239
EXIT: 1.07920
STOPLOSS: 1.08239
PNL: -$23.6
PIPS: 10/20
Trade Analysis and Insights:
Entry
I patiently waited for the price to align with the Exponential Moving Average (EMA) and touch the resistance zone on lower timeframe. With the currency pair at a monthly peak, I exercised caution, anticipating any sudden downward correction.
Exit & Stop loss
10 pips stop loss and 20 pips take profit.
Prior to engaging in trading activities, I evaluated two crucial elements: the 21-day exponential moving average (EMA 21) and significant price levels. The EMA 21 served as an indicator of the market’s overall trend, while I closely observed patterns in price fluctuations. In order to mitigate potential risks, I identified resistance zones and considered EMA 21 as noteworthy levels. My primary objective was to execute well-informed trades and establish suitable plans for setting stop-loss orders.
Lot Size
20,000 units or 0.20 Standard Lot or 20 micro lots.
We allocated 20,000 units, following a 1% risk management strategy for each trade and also have a attainable trade. To account for this approach and potential price rally we adjusted our allocation size accordingly.
Trade #1 Result = Loss (-$23.6)
Reflection on Trade
Prior to engaging in trading activities, it is crucial to ensure that you consistently make well-informed decisions. Additionally, it is essential to verify that the overall trend in higher timeframes aligns with your chosen entry point in lower timeframes. Furthermore, it is imperative to establish an appropriate stop loss zone and adhere to it strictly, without any inclination to adjust it. Be resolute in cutting losses promptly to prevent further financial setbacks.
Improvements to be considered:
Always check the higher timeframe to make sure the trade is perfectly aligned with the lower timeframe.
TRADE #2 OVERVIEW
Forex (Oanda-MT4)
PAIR: AUD/USD
LONG/SHORT: LONG
LOT SIZE: 0.2
ENTRY:0.68016
EXIT: 0.68421
STOPLOSS:0.68119
PNL:
PIPS: 10/20
Trade Analysis and Insights:
Entry
I exercised patience as I awaited the price to reach a point where it aligned with the Exponential Moving Average (EMA) and touched the support zone on a lower timeframe
Exit & Stop loss
10 pips stop loss and 20 pips take profit.
Before commencing any trading activities, I carefully assessed two key factors: the 21-day exponential moving average (EMA 21) and important price levels. The EMA 21 acted as a signal for the general trend in the market, and I diligently monitored price patterns to gain insights into fluctuations. To minimize potential risks, I identified resistance zones and regarded the EMA 21 as significant levels. My main goal was to execute trades based on informed decisions and develop appropriate strategies for placing stop-loss orders.
Lot Size
20,000 units or 0.20 Standard Lot or 20 micro lots.
We decided to allocate a total of 20,000 units, taking into consideration a 1% risk management strategy for each trade. Additionally, we took into account the possibility of a price rally and adjusted our allocation size accordingly to ensure our trade objectives can be achieved.
Trade #2 Result = Win (+$20.6)
Reflection on Trade
Despite only achieving half of our intended take profit, we displayed remarkable determination and adaptability by making adjustments to ensure a risk-to-reward ratio of 1:4. Unfortunately, the market subsequently experienced a pullback, yet we still managed to secure a profit from the trade.
Improvements to be considered:
Get the original take profit and re-enter on other time to have a better planning.
TRADE #3 OVERVIEW
Forex (Oanda-MT4)
PAIR: AUD/USD
LONG/SHORT: LONG
LOT SIZE: 0.2
ENTRY:0.68169
EXIT: 0.68069
STOPLOSS:0.68269
PNL: -$20.0
PIPS: 10/20
Trade Analysis and Insights:
Entry
I diligently observed the market, eagerly anticipating the opportune moment when the price would harmonize with the Exponential Moving Average (EMA) and gracefully graze the support zone on a lower timeframe. Throughout this waiting period, I remained steadfast, restraining any impulse to act prematurely.
Exit & Stop loss
10 pips stop loss and 20 pips take profit.
Prior to engaging in any trading endeavors, I conducted a thorough evaluation of two crucial elements: the 21-day exponential moving average (EMA 21) and significant price levels. The EMA 21 served as an indicator for the overall market trend, while I attentively observed price patterns to understand variations. To mitigate potential risks, I identified areas of resistance and considered the EMA 21 as significant thresholds. My primary objective was to execute trades based on well-informed choices and formulate suitable strategies for implementing stop-loss orders.
Lot Size
20,000 units or 0.20 Standard Lot or 20 micro lots.
We decided to allocate a total of 20,000 units, taking into consideration a 1% risk management strategy for each trade. Additionally, we took into account the possibility of a price rally and adjusted our allocation size accordingly to ensure our trade objectives can be achieved.
Trade #3 Result = Loss (-$20.00)
Reflection on Trade
Sometimes we will receive an early signal or indicator that suggests the price will continue moving in our desired direction, only to see it reverse first and hit our take profit level after we got out.
Improvements to be considered:
Wait for the market structure to be completed and have a better entry and avoid being taken out before the trade goes in your way.
Overview of trades
Trades taken: 3 Trades
Win rate: 33% (1/3)
PnL: -$23
Understanding and paying attention to the higher timeframe trend is of paramount importance when analyzing and making trading decisions in financial markets. The higher timeframe refers to longer time intervals, such as daily, weekly, or monthly charts, whereas lower timeframes include shorter intervals like hourly or minute charts. Here’s a brief explanation of why the higher timeframe trend takes precedence over the lower timeframe trend:
- Reliable Trend Identification: Higher timeframes provide a more accurate and reliable depiction of the overall market trend. Since they encompass a broader scope of price movements, they filter out noise and random fluctuations that are prevalent in lower timeframes. By focusing on the higher timeframe trend, traders gain a clearer picture of the dominant market direction.
- Longer-Term Market Dynamics: Higher timeframes capture the underlying fundamental factors and longer-term market dynamics that drive price movements. Economic trends, geopolitical events, and fundamental shifts tend to have a more significant impact on the market over extended periods. By considering the higher timeframe, traders can align their strategies with these fundamental forces, which can enhance their decision-making process.
- Increased Probability of Success: Trading in alignment with the higher timeframe trend increases the probability of success. When the higher timeframe trend aligns with a trader’s strategy, it signifies that the larger market participants are supporting the same direction. This alignment of market forces enhances the odds of a successful trade, as it reduces the chances of being caught in counter-trend moves or false breakouts that are prevalent in lower timeframes.
- Reduced Noise and False Signals: Lower timeframes tend to exhibit more noise and false signals due to their susceptibility to short-term market fluctuations. By relying solely on lower timeframes, traders may be subject to misleading price patterns and erratic market behavior. The higher timeframe trend acts as a filter, helping traders identify the genuine market movements amidst the noise and avoid getting trapped in false signals.
In summary, the higher timeframe trend provides a more accurate representation of the market’s direction, captures the long-term market dynamics, increases the probability of success, and reduces noise and false signals. Incorporating higher timeframe analysis into trading strategies allows traders to make more informed decisions, enhancing their overall trading performance.
Warren Buffett
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”