T4 – EUR/JPY

IMPULSE – CORRECTION – IMPULSE

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ENTRY

Daily/4H/1H/30mins timeframe (select only 1)

[1] Price trailed by 30SMA – ensure strength of first impulse wave (✓) 

[2] Pullback between 30SMA and 150SMA (✓)

[3] Corrective structure formation with 2×2 touches (✓)

[4] Stop order at the break of corrective structure with stop loss after swing L/H (✓)

[4] Stop order after price bounce off area of value with volatility stop

Additional confluences: Support or Resistance, ADX35, Linear Trend LinesFibonacci Retracement 50%, ATR and Elliot Waves.

1% capital risked for potentially 2R

Open: 119.35 | Stop loss: 119.85 (-50 points) | Take Profit: 118.35 (+100 points)

Remarks: Orders were keyed in before the complete formation of the corrective structure, hence, the not-very-strategic placement of the stop loss.

MANAGEMENT

Keying in the trade, use volatility stop placed under/above an established swing L/H or moving average cross or estimating volatility using ATR.

Real stop loss placed under/above the anticipated swing L/H using 150SMA as a guide.

Take profit calculated using the length of the prior impulse wave rounded off to next nearest swing point/key level.

Once entry triggered and break out, shift automated volatility stop to real stop position.

At 50% of 2nd impulse or a swing L/H established, shift stop to break even.

At about 80% of 2nd impulse, shift stop to the 50% mark or below/above swing L/H.

If price breaks and closes under/above the 30SMA, tighten stop loss and prepare for manual exit.

EXIT

download (4).pngScreen Shot 2017-03-31 at 3.00.54 PM.pngRemarks: Orders were keyed in before the complete formation of the corrective structure, hence, the not-very-strategic placement of the stop loss.

Now that came back to bite didn’t it. Prematurely kicked out of the trade. Price did not even reach the level. There must have been increased spreads during the market opening/closing period.

[1] Initial stop loss

[2] Trailing stop, as mentioned under management

[3] Manual exit due to change of momentum and break of market structure

[4] Take profit

Review

download (6).pngDefinitely stopped out prematurely. Good idea, bad execution.

download (1).pngWould have gone on to hit Take Profit.

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