It’s a mixed bag for me these days as I lost one trade but scored gains in another. Here’s how it all went down with my EUR/GBP and AUD/JPY setups. Make sure you check out my initial trade ideas before reading on!
I decided to short this pair when I saw a break of the head and shoulders neckline on the 4-hour time frame a couple of weeks ago. At that time, Brexit polls had been showing a slight lead in favor of those voting to stay in the EU so the pound had been gaining traction.
I was able to pocket some gains when I closed my position to avoid weekend risk then I decided to reopen my trade the following Monday. However, the tide turned in favor of voters who wanted a Brexit, forcing the pound to return its recent gains and more against the euro.
With that, I also gave up my recent gains on this short EUR/GBP trade and wound up getting stopped out on my reopened position. I made 45 pips or a 0.12% gain on my original trade then lost 225 pips or 0.47% on my reentered trade, for a total of a 180-pip dent or a 0.35% loss on my account.
In retrospect, I probably should’ve just set a smaller position for my reopened trade so as to not give up my recent wins or at least end up with a breakeven result. Another way I could’ve played it was to set a tighter stop or to close entry when sentiment started to shift.
This one was just a simple short-term range play on a bounce off support at the 78.50 minor psychological mark. My fundamental thinking was that relatively upbeat data from Australia could allow AUD/JPY to bounce, although risk sentiment appeared to favor the lower-yielding yen back then.
Fortunately, support at 78.50 held even on that fakeout towards the end of last week. Optimistic expectations for the RBA statement this week appear to be propping this pair up for now but I thought it best to just take my profits for now then just consider reentering if the central bank makes an upbeat announcement.
I was able to make 65 pips on this setup for a 0.25% win on my account, making up for a huge part of my loss on my other trade. I’ll keep an eye out for any sharp moves during the RBA decision so make sure you’re following me on my social media accounts for quick updates!
And as always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups!