Day Trade Journal – Day 4- June 1,2023
TRADE #1 OVERVIEW
Forex (Oanda-MT4)
PAIR: EUR/JPY
LONG/SHORT: LONG
LOT SIZE: 0.01 (1000 UNITS)
ENTRY: 149.080
EXIT: 149.360
STOPLOSS: 149.022
PNL: -$1.10
Trade Analysis and Insights:
Entry
I entered the trade aggressively when the price neared a pullback. My decision was based on identifying a trend reversal on a lower timeframe, indicating a potential opportunity. Additionally, I conducted an analysis and determined that the take profit zone would occur before reaching a major zone. This analysis was further supported by an EMA (Exponential Moving Average) cross, which provided confirmation for the anticipated continuation of the trend.
Exit & Stop loss
For the first trade, EUR/JPY, there is a 7 pips stop loss and 15 pips take profit.
Before entering the trade, I carefully considered two potential price levels where prices might react, which I marked with an orange horizontal line. I understand the importance of prioritizing the placement of stop loss and take profit levels to manage risk effectively. In this particular case, I set the stop loss just above the plotted zone level to limit potential losses. It’s crucial to keep in mind that achieving the desired profit may take time, so patience and discipline are key. Before entering any trade, it’s essential to assess the risks and rewards involved and make adjustments to your levels accordingly
Lot Size
1,000 units or 0.01 Standard Lot or 1 micro lot.
In order to efficiently handle unexpected price surges, we employ a standardized allocation strategy for managing this particular trade.
Trade #1 Result = Loss (-$1.10)
Reflection on Trade
Whiplash trades are common in trading, where the price initially moves against you, hitting your stop loss before eventually reaching your profit target. In this trade, we got taken out but experienced a full reversal after bouncing on the second support zone.
It’s important to use a stop loss because there can be fake whiplash trades, where holding onto a trade expecting a reversal doesn’t materialize. Stay disciplined, set stop losses, and manage risk effectively to navigate such situations confidently.
Improvements to be considered:
We can set our stop loss further down the second zone to have a redundancy on stop loss
TRADE #2 OVERVIEW
Forex (Oanda-MT4)
PAIR: EUR/USD
LONG/SHORT: SHORT
LOT SIZE: 0.01
ENTRY: 1.06820
EXIT: 1.06617
STOPLOSS: 1.06836
PNL: -$2.01
Trade Analysis and Insights:
Entry
I aggressively entered the trade near a pullback when the price touched the EMA 21 (White line). I identified a trend reversal on a lower timeframe and aimed to capitalize on the continuing downtrend indicated by the higher timeframe.
Exit & Stop loss
For EUR/USD, there is a 10 pips stop loss and 20 pips take profit.
Before entering the trade, I meticulously analyzed two Exponential Moving Averages (EMAs) and observed the price touching the previous support level, which had now transformed into a potential resistance. Additionally, I strategically positioned the stop loss order on the secondary major resistance, as it indicated consolidation at that level.
This thorough evaluation of the EMAs and the price action at key support and resistance levels influenced my decision to enter the trade. By considering these factors, I aimed to increase the likelihood of a successful trade outcome.
Lot Size
1,000 units or 0.01 Standard Lot or 1 micro lot.
We employ a standardized allocation strategy for managing this particular trade, since the stop loss is needs to be accommodated on the major resistance levels.
Trade #2 Result = Loss (-$2.01)
Reflection on Trade
To avoid chasing trades and cutting losses quickly, it is crucial to spot potential fake pullbacks early. However, having a significant spread on both the bid and ask prices, as well as the current price, can be a double-edged sword. While a larger spread might indicate a potentially winning trade, it can also result in unfavorable outcomes, as was the case in this situation.
Improvements to be considered:
No moving of stop loss and cut losing trades even though it should be a winner in the first place, move on and never let your emotions cloud your judgement.
TRADE #3 OVERVIEW
Forex (Oanda-MT4)
PAIR: GBP/JPY
LONG/SHORT: LONG
LOT SIZE: 0.01
ENTRY:173.676
EXIT:173.946
STOPLOSS: 173.522
PNL: -$1.12
Trade Analysis and Insights:
Entry
I aggressively entered the trade near a pullback when the price touched the EMA 21 (White line) indicated by the higher timeframe. This trade has a higher probability of going uptrend since higher timeframe indicates and all JPY pair is rallying after the news the other day.
Exit & Stop loss
For GBP/JPY, there is a 8 pips stop loss and 17 pips take profit.
Similar to our initial trade, I carefully examined two Exponential Moving Averages (EMAs) and noticed the price hitting the former support level, now acting as a potential resistance. I also placed the stop loss order at the secondary major resistance, indicating consolidation at that point. This analysis of EMAs and price action at crucial support and resistance levels influenced my decision to enter the trade, aiming for a higher chance of success
Lot Size
1,000 units or 0.01 Standard Lot or 1 micro lot.
We utilize a standardized allocation approach to handle this trade, as it requires accommodating the stop loss at significant resistance levels.
Trade #3 Result = Loss (-$1.12)
Reflection on Trade
This trade got whiplashed as well as it finds support on the 200 EMA line (Yellow line) and consolidated for a while and continued to the upside.
Improvements to be considered:
Wait for confirmation and be patient to have a solid entry, and never catch a falling knife of a price action.
Overview of trades
Trades taken: 3 Trades
Win rate: 0% (0/3)
PnL: -$4.23
Unfortunately, today’s trades didn’t result in any wins as we were stopped out before they could move in our favor. It seems that our emotions got the better of us, which is a common mistake, especially for rookies. However, it’s crucial to prioritize risk management and limit our trades to avoid making bigger mistakes.
Let’s remember that as traders, we should strive for four possible outcomes to achieve success:
- Big Win (Rare): Although rare, a big win is the ultimate goal and can significantly boost our trading performance.
- Small Win: A small win is a positive outcome that contributes to our overall profitability. Consistently achieving small wins can accumulate into significant gains over time.
- Breakeven: Breaking even means that our trade neither resulted in a profit nor a loss. While not ideal, it’s still preferable to a loss and demonstrates the importance of managing risk effectively.
- Small Loss (Controlled Loss): Experiencing a small loss is inevitable at times, but it’s crucial to keep it controlled. By managing our losses, we can preserve our capital and avoid detrimental effects on our mental game.
We must always prioritize avoiding big losses. This is not only important to prevent financial burdens but also to safeguard our mental well-being, as significant losses can have a negative impact on our confidence and decision-making abilities.”
Remember, trading is a continuous learning process, and by focusing on risk management, emotional control, and maintaining a disciplined approach, we increase our chances of becoming successful traders in the long run.
Quote for the Day
“Successful trading is not about avoiding losses altogether, but rather managing them effectively and learning from each experience. It’s the ability to control risk and emotions that separates the winners from the rest.”