Day Trade Journal – Day 2- May 30,2023
TRADE #1 OVERVIEW
Forex (Oanda-MT4)
PAIR: GBP/USD
LONG/SHORT: SHORT
LOT SIZE: 0.02 (2000 UNITS)
ENTRY: 1.23459
EXIT: 1.2334
STOPLOSS: 1.23535
PNL: -$1.38
Trade Analysis and Insights:
Entry
Enter near zone, price reacts after touching resistance and showing confirmation bearish candle on top of the downtrend regression channel.
Exit & Stop loss
For the first trade GBP/USD, there is a 7 pips stop loss and 14 pips take profit.
It is important to consider the placement of your stop loss and take profit levels. In this case, the stop loss placement might be tight since it’s inside the resistance zone level. However, this placement allows for a lower travel time to reach your desired take profit.
Lot Size
2,000 units or 0.02 Standard Lot or 2 micro lots.
In order to accommodate the tighter stop loss and take profit set earlier, we have a higher allocation than usual. By doing so, we enhance our ability to wait for a second entry opportunity and increase the probability of winning the trade.
Trade #1 Result = Loss (-$1.38)
Reflection on Trade
Even though higher timeframe is giving signs of continuation on the downside, look more on the lower timeframe and see if the trade is on a reversal phase and act accordingly to what the lower timeframe is doing.
Improvements to be considered:
Wait for a 2nd entry opportunity to have a higher probability of winning the trade.
TRADE #2 OVERVIEW
Forex (Oanda-MT4)
PAIR: EUR/JPY
LONG/SHORT: LONG
LOT SIZE: 0.01 (1000 UNITS)
ENTRY: 150.030
EXIT: 150.311
STOPLOSS: 149.889
PNL: +2.02
Trade Analysis and Insights:
Entry
Enter near support level and confirmation reversal candle after near touching of 200 EMA (yellow line)
Exit & Stop loss
For EUR/JPY, there is a 13 pips stop loss and 30 pips take profit.
Stop loss placement is widen since the volatility for any JPY pair for this day is high, due to news and other economic factors.
Lot Size
1,000 units or 0.01 Standard Lot or 1 micro lot
We have a standard allocation for this trade, this is to accommodate the wide spread of JPY pair and have a cushioning for price and have a wiggle room for any sudden price movements.
Trade #2 Result = Win (+$2.02)
Reflection on Trade
Despite having a high pip target for take profit, it astonishingly took just one candle to reach our desired level and achieve a clean exit on the trade
Improvements to be considered:
To maximize your trade results, it may be beneficial to extend the holding period for this particular pair and aim to extract a minimum of 75% of the original allocation once the price reaches the initial take profit level.
TRADE #3 OVERVIEW
Forex (Oanda-MT4)
PAIR: EUR/USD
LONG/SHORT: SHORT
LOT SIZE: 0.01 (1000 UNITS)
ENTRY: 1.07329
EXIT: 1.07127
STOPLOSS: 1.07427
PNL: -$0.98
Trade Analysis and Insights:
Entry
As the price approaches a strong resistance zone, it presents an anticipation trade opportunity. This is due to the combination of an uptrend on a higher timeframe and a major downtrend on a lower timeframe. Additionally, the price action is forming a bearish double top pattern, further supporting the possibility of a reversal.
Exit & Stop loss
For EUR/USD, there is a 10 pips stop loss and 20 pips take profit.
This will give enough space for the price action to move around and also not be taken out on a sudden spike in price.
Lot Size
1,000 units or 0.01 Standard Lot or 1 micro lots.
We employ a standard allocation strategy for this trade to ensure we can effectively handle any unexpected price surges. This approach allows us to have a cushion and flexibility in the event of sudden price movements. By allocating a predetermined amount of resources, we can mitigate potential risks and adapt to changing market conditions more effectively. This strategy provides us with the necessary wiggle room to make adjustments and seize opportunities that may arise during the trade.
Trade #3 Result = Loss (-$0.98)
Reflection on Trade
Despite having ample room for our stop loss, we unfortunately experienced a premature stop out before the market eventually reached our intended take profit level. Nonetheless, this situation highlights our commitment to effective risk management. We demonstrated discipline by promptly cutting our losses without hesitation and not allowing the market’s movements to undermine our confidence in future trades. This approach is crucial for maintaining a resilient and focused mindset in the face of unpredictable market conditions.
Improvements to be considered:
Wait for a reversal first and enter on the second confirmation entry to have a higher probability of not taken out prematurely.
Conclusion
Overview of trades
Trades taken: 3 Trades
Win rate: 33% (1/3)
PnL: -$0.34
Every trade was executed in accordance with our well-thought-out plan, ensuring that risks were minimized and maintained at a manageable level. Furthermore, we took the time to thoroughly document and reflect upon each trade, which not only provides us with opportunities for improvement but also instills confidence in our long-term trading endeavors. By consistently following our strategies and diligently analyzing our performance, we can continually enhance our skills and achieve success in the future.
Quote for the Day
“Success in day trading requires discipline, patience, and a keen understanding of market dynamics. Embrace volatility as an opportunity, manage risks diligently, and let your strategies evolve. Remember, a single day’s trade does not define your journey, but each day’s trade contributes to your growth as a trader.