As seen on the daily timeframe, price is at a resistance and on a long term downward trend line. Candlesticks at area shows inability to cross resistance at the 1.66 level which was formerly a support level.
The 4H timeframe reflected the range as well, however, I felt that the 1H reflected it better with more details. The break out from the range with long bearish candles registered ADX 30 at its highest with small corrective candles making its way into the TAZ (15/45 SMA). Highest point of the corrective candles equalled the lowest point of the range with quite a bit of rejection.
1100 – Stop order of 1600 units or 1.6 micro lots was placed on the shorter term moving average and triggered at the 11 am candle. Stop loss when price closes above the swing (2% of capital) and volatility stop above the crossover (4% of capital). Target profit would be just above the 1.6 support mark as seen on the daily. Potentially a 3R trade.
Note: The higher risk taken, instead of 1%, is due to the much smaller account size.
Entry: 1.63835 | Stop loss: 1.65 | Target Profit: 1.60290
Psychology and emotions – Feeling a bit sad with personal matters, very busy schedule, wanting to make money. Did I trade according to the charts? Yes. Followed the plan with strategy checklist.
1800 – Trade has moved in favoured direction. Stop loss shifted down to just above the swing high at 1.6416.
Psychology in check with not much temptation to exit the trade early. Will be hoping to see it through to target profit, trailing stop or a close above the LT moving average.
Side note: The spread on the GBP/CAD pair was very high actually (3.5-5.0). Next time, look at a similar pair like the GBP/USD which had a very similar set up but had a spread (1.0-1.5) about 4 times less.
2300 – Trailing stop triggered. Market initially moved in favoured direction but just jumped. Unexpected of course, but that is the forex market. Timing at 2300 suggests volatility was due to the closing of European markets.
Result: Loss of 1% of capital
What could have been done better? Shifting the stop loss to breakeven instead of above the swing high might have been a better idea.
Traded according to the plan, did not break any rules.