A review of trade plans uploaded for the week ending 20 October. Pretty much a weekly SWOT.
Trade plans for the week with links to original plan
EURUSD Short @ 1.18 SL @ 1.18295 TP @ 1.1690 Good
Keeping an eye on USDZAR at WM2 Good
AUDJPY 88.00 double bottom M15 awaiting confirmation Good
Pay attention to Gold at WM3 reversal forming on M15 awaiting confirmation Good
Watching 51.00 area for WTI TBC next week
USDJPY inverse correlation with Gold and EURUSD trade long @ 111.50 maybe Good
CADJPY @ WM1 on a Monday at WPP by Friday Good
USDCNH WM2 – WM4 awaiting pullback to WPP Not triggered
Paying attention to 4905.21 area on Bitcoin Not triggered
Keeping an eye on Gold TBC next week
Strategy this week was definitely better than the previous week. The use of correlation in commodities with the Dollar and subsequently the Dollar pairs was on point. However, despite the strategy being better, tactics still need work. A lot of above trade plans were based on using M15 tactical setups which did not work for every plan. Let’s review each one and see how the trade could have been entered and take that learning into the next week.
1. EURUSD Short @ 1.18 SL @ 1.18295 TP @ 1.1690
– This trade did not require a tactical setup on a lower time frame chart due to it being a pending order
– We did see offers at this level and price did move lower. Unfortunately, price did not move all the way to the profit target and the TP was at WS1 which was evident from the double bottom at this price. This is not a fault of ours, this is the market. I took profit at WS1 when price double bottomed as I was paying careful attention to EURUSD and Dxy at the time.
2. Keeping an eye on USDZAR at WM2
– This was a beautiful mover this week
– Price double bottomed at WM2, made a higher high and then came off the 38.2% fib and made a higher high.
– The difficulty with fib is you don’t know which fib price will come up off of. In this instance, an M5 tactical entry was key with the confluence of support between role reversal, 38.2% fib and a very slow 21 and 55 on H1. In all fairness, it’s always easy to look back at a chart and say – oh yes, of course, that makes sense though in the moment one can’t be sure. The entry was also an hour or two into Asia trade and so in all probability, a pending order was placed at the role reversal of the double bottom, which makes sense.
– We then had bears selling at WM3 which was the 61.8% of the bearish move from the week before, this brought price down eventually but only into the bull trap at the role reversal of the previous high. If you were basing your trading on role reversals and trading in the direction of the H1 trend then this was your first entry unless you traded the double bottom at WM2. Not a fan of trading double bottoms and double tops to be honest -I really do prefer getting in on the higher low or lower high and I am ok with that though I am thinking that when price is at a key support or resistance level (WM2 or WM3) getting in on a smaller lot size makes sense with the SL below WS1 or above WR1 respectively. This avoids waiting for a confirmation of a confirmation. Also, the risk makes sense if price moves to the weekly target.
3. AUDJPY 88.00 double bottom M15 awaiting confirmation
– The trade plan identified a double bottom at WPP and said to look for a higher high and a pullback to role reversal. Just after posting the trade I was happy that I was waiting for the tactical confirmation because price then moved down to WM2. I maintained that I was going to wait for price to bottom, make a higher high and then pull back for the higher low at which point I would pull the trigger. Price triple bottomed and I waited patiently for the higher high though once price moved higher it didn’t give me the pullback I was looking for – it did ride the M5 21 though and the pullback to MPP on M5 could have been traded.
– It is important to note that this trade was a confirmation of the tripple bottom from the previous week and that waiting for a confirmation of a confirmation might be too conservative. The reason I was waiting for these tactical setups was due to the USDZAR trade discussed in last week’s Good, Bad, Ugly review though there was a distinct difference. The role reversal of AUDJPY was at WM2, last week’s USDZAR’s role reversal was at WM3. Therefore the lesson wasn’t so much about waiting for confirmation, even though this is still important, it’s about Bulls buying at support and Bears selling at resistance. WM2 is support and a double bottom at WM2 should be considered with a lower lot size. Similar to this week’s USDZAR trade.
4. Pay attention to Gold at WM3 reversal forming on M15 awaiting confirmation
– Here’s another trade where the strategy was solid and price was at resistance though the M15 tactics did not go as planned. There was, however, a tactical setup on M5 though that was not the trade plan.
– Similar to USDZAR and AUDJPY above, a reversal pattern at a key level of resistance should be seriously considered with a smaller lot size.
5. Watching 51.00 area for WTI
– Price did respect this support on Friday and did double bottom on M5 followed by a higher high. I did not take the trade due to the support being in the bearish zone. We will see if price moves higher this week or if we get down to a better price in the 50.00 to 50.50 area.
6. USDJPY inverse correlation with Gold and EURUSD trade long @ 111.50 maybe
– Another trade where the tactical setup occured on M5 instead of M15. The second chance was at WPP.
– Getting in at the WM2 double bottom with a lower lot size would have worked as was the case in the previous trade plans.
7. CADJPY @ WM1 on a Monday at WPP by Friday
– Price went a lot higher than WPP
– This trade did do what we wanted on M15 with a break higher and a pullback to role reversal on M15 with the role reversal marked by WS1.
8. USDCNH WM2 – WM4 awaiting pullback to WPP
– Price did not pullback to WPP as planned so this trade plan was not triggered.
In conclusion, the strategy and tactics for this week were good though the market did not setup the way I thought it would. The adjustment for the week ahead, when bullish consider taking the trade on the reversal pattern at WM2 instead of waiting for the higher high and visa versa for being bearish. I am conservative though I’ll try it and see what the outcome is. Another alternative is looking to M1 for the tactical entry.
My last trade plan for the week was Keeping an eye on Gold. Gold has subsequently double bottomed at MM2 with EURUSD at the role reversal of its double bottom. Therefore I did not discuss this post in this review as it rolls over to next week.
All the best for the week ahead.