Entry criteria:
1) Default MACD crossover
2) Long MACD still negative
3) Stochastic crossover downwards
Despite H4 stochastic upwards and less than 3 hours from important US news release (GDP), I went ahead with the trade as I felt it can be a retracement based on criteria 1 to 3. The Default MACD crossover indicated a retracement while the negative long MACD indicated the trend is still downwards. I had intention to exit before the news if there are profits to take. This is not a very good trade as the trend is unclear, indicated by the numerous crossovers of moving averages. As time nears the news release, there was’nt enough profits to take so I held on to risk for the gains. True enough, the pair reacted to news release after 9:30pm. Price began to fluctuate more and eventually hit my stop loss.
Sold 1 mini contract at 0.8596
Bought 1 mini contract at 0.8932
Stop loss was set at 0.8964, based on 38.2% Fib level.
Profit target was set at 0.8845, based on Daily chart support.
I shifted my stop loss to 0.8956 to as I reckon that if the price breaks the day high, the downtrend is likely to reverse. The day high is a strong resistance with the price testing the level 4 times without breaking. I exited the trade after the resistance was broken. Monitoring further, the price went south and I would not have been stopped out if I kept my stop loss at 38.2% Fib.
{ 2 comments… read them below or add one }
Hi Alvin,
I know nothing about forex. How much is the margin for a 1 mini contract for lets say AUD/USD pair? How much is the margin for a full contract?
Thanks.
1 mini contract of AUD/USD is worth AUD$10,000. 1 standard contract of AUD/USD is worth AUD$100,000.