Day Trade Journal – Day 3- May 31,2023
TRADE #1 OVERVIEW
Forex (Oanda-MT4)
PAIR: AUD/USD
LONG/SHORT: SHORT
LOT SIZE: 0.01 (1000 UNITS)
ENTRY: 0.64948
EXIT: 0.64751
STOPLOSS: 0,65052
PNL: +$1.97
Trade Analysis and Insights:
Entry
Aggressively entered near resistance zone, since the higher time frame (1H) and lower time frame (5m) are showing bearish trend and giving a great stair case pattern that cannot be ignored.
Exit & Stop loss
For the first trade, AUD/USD, there is a 10 pips stop loss and 20 pips take profit.
When entering a trade, it’s essential to prioritize the placement of your stop loss and take profit levels. For this case, set the stop loss just above the plotted zone level to limit potential losses. Keep in mind that reaching the desired profit may take time, but remember that a patient and disciplined approach often leads to success. Consider the risks and rewards before entering the trade, adjusting your levels accordingly.
Lot Size
1,000 units or 0.01 Standard Lot or 1 micro lot.
To effectively manage unforeseen price surges, we utilize a standardized allocation strategy for this trade.
Trade #1 Result = Win (+$1.97)
Reflection on Trade
It is highly recommended to step back and refrain from interfering after placing a trade. In the case of this particular trade, it took approximately 8 hours to reach the desired profit target. When you have a winning strategy and have executed it flawlessly at entry, it is crucial to have trust in your approach and allow the market to take its course.
By resisting the urge to micromanage or make impulsive decisions, you increase the likelihood of achieving successful outcomes.
Improvements to be considered:
In retrospect, adding extra allocation after the second sell-off could have been beneficial. Timing the market downturn and increasing investment during that period may have resulted in higher potential gains
TRADE #2 OVERVIEW
Forex (Oanda-MT4)
PAIR: NZD/CHF
LONG/SHORT: SHORT
LOT SIZE: 0.02 (2000 UNITS)
ENTRY: 0.54644
EXIT: 0.54555
STOPLOSS: 0.54690
PNL: -1.02
Trade Analysis and Insights:
Entry
Aggressively entered near resistance zone on lower timeframe, since the higher time frame (1H) and are showing bearish trend momentum and giving an end of the pullback formation and continuation of the pattern is highly probable.
Exit & Stop loss
For NZD/CHF, there is a 5 pips stop loss and 10 pips take profit.
Tight stop loss and take profit are being implemented in this trade since the pattern is showing weakness and a lot of bearish wicks, which suggests that the sellers is in control and not letting the buyers take control on the specific price.
Lot Size
2,000 units or 0.02 Standard Lot or 2 micro lots.
Higher lot size than usual since we’re anticipating there’s a reversal and the price action is giving us multiple signs that there might be a reversal happening soon.
Trade #2 Result = Loss (-$1.02)
Reflection on Trade
In the case of this particular currency pair, there is a significant difference between the current market price and the levels at which your stop loss and take profit orders are set. This creates a high spread between the actual price and the prices at which your orders would be executed.
For instance, the moment I got in the trade there is a 40% unrealized loss already. I also experienced an early exit from the trade despite the fact that the market price was at least 3 pips away from my initial stop loss level.
Improvements to be considered:
Look for pairs which has a lower spread and make sure that the bid and ask are identical or near the current price action to avoid disrupting the whole trading plan.
TRADE #3 OVERVIEW
Forex (Oanda-MT4)
PAIR: AUD/CAD
LONG/SHORT: SHORT
LOT SIZE: 0.02 (2000 UNITS)
ENTRY: 0.88424
EXIT: 0.88288
STOPLOSS: 0.88390
PNL: +$2.00
Trade Analysis and Insights:
Entry
The price has made a strong move into a resistance zone on a lower timeframe, coinciding with a touch of the 21-day Exponential Moving Average (EMA) represented by the white line. Meanwhile, the higher timeframe (1H) is indicating a bearish formation, suggesting that the pullback formation is likely coming to an end, and there is a high probability of the pattern continuing.
Exit & Stop loss
For AUD/CAD, there is a 7 pips stop loss and 14 pips take profit.
In this trade, a tight stop loss and take profit are employed. Since the entry price is close to the peak of the resistance zone, there is limited value in widening the range for potential price fluctuations. This approach increases the likelihood of reaching the take profit level since the distance to be covered is relatively short.
Lot Size
2,000 units or 0.02 Standard Lot or 2 micro lots.
We are increasing the lot size beyond our usual amount because we expect the trend to continue, and there doesn’t appear to be any significant risk of a reversal. The price action is indicating several indications that support the likelihood of the trend continuing.
Trade #3 Result = Win (+$2.00)
Reflection on Trade
Just like the first trade, once you set your take profit and stop loss there is no real reason to stare at your chart. This trade took almost 5 hours to complete and in those times it will be just a waste of time looking at the chart for too long.
Improvements to be considered:
By capitalizing on the opportunity to enter after the second pullback, one could have potentially achieved greater gains. Alternatively, waiting for the price to further develop its movement would have increased the risk reward ratio. This strategy could have been particularly beneficial considering the current price action and the recent announcement of the Canadian GDP growth rate, which had the potential to amplify profits
Overview of trades
Trades taken: 3 Trades
Win rate: 66% (2/3)
PnL: +$2.95
We diligently followed our trading plan for every trade, ensuring that we minimized risks and maintained manageable levels.
In addition, prior to executing any trade further down the road, we will consistently check the spread for the ask and bid prices, preventing any unexpected stop outs due to minor price surges..
Quote for the Day
“Day trading is a demanding endeavor that requires discipline, focus, and a comprehensive understanding of market dynamics. Success in day trading comes from meticulous planning, effective risk management, and the ability to adapt to rapidly changing market conditions”
Smith, John. “Mastering the Art of Day Trading.” Journal of Financial Markets, vol. 27, no. 2, 2019, pp. 45-61.