This was a sample trade that can be taken on 12 August 2021 (EURAUD long trade)
Pre- Analysis:-
Correlation:- EURAUD (10 / 6) , EUR was stronger than AUD
Market State:- price was traded under buyer's territory as shown on the chart below:-
Session Breaks:- EUR pairs group broke the NY / Asia session with strong sentiment (6 pairs)
AUD group of currency broke the NY / Asia session with weak sentiment (4 pairs)
Fundamental:- only EUR has news release on this day with strong sentiment, industrial production (mom, Jun) (-0.3% / -0.2% / -1.1%) but this strong sentiment is with (*). while there was no news release for AUD.
Trading Plan:-
Trade Classification:- B trade (the correlation shows EUR stronger than AUD but it was not significant strong, market state support this long trade, session breaks clearly support EUR. only fundamental news not clearly support this long trade. thus B trade was classified)
Entry:- as usual wait for pullback / digestion
Pullback details:-
- no (1) area shows first pullback, no trade was able to take
- no (2) area was a digestion and it show kind of full digestion (almost get back to the starting point of pullback)
- after full digestion, price unable to go lower
- after an attempt to go lower and failed price made range as shown on no (3) area
- an entry can be made inside the range area & at the opening hour of NY session.
Entry:- 1.59572 (8:06pm)
Stop:- 1.59458 (12 pips stop)
Profit:- trail the profit
Post Analysis:-
- after price move up, 8:30pm stop move to almost half of the risk as shown on line (a). this reduce the risk.
- after price came back to entry level & bounce back up to almost 1R trade, stop move to breakeven.
- 9:15pm price went a little bit higher than 1R trade, profit locked by moving the stop to line (b), at this point no risk involve anymore & if price came back and hit the stop than this trade will out with a little profit.
- at this moment I felt that this trade might still not working but decided to still give chance if this trade can perform that is why I only lock in some small profit rather than close it all.
- around 10:18pm price reach an about 2R trade decided to close and take profit at roughly 1.59842.
- this trade still can give more than 3R profit as shown on the chart above.
- but how to hold to that trade? this need to be research and mastered.
- as an alternative, instead of closing the trade with 2R profit, you can move the stop to secure 1R profit and let the profit run and only close when the next Asia session about to open. this will give you at least 3R profit.