Thursday, March 3, 2016
Sideline: Short EURZAR
On Monday 22/02/16 morning, I saw that there's a bearish reversal on EURZAR. There's also a nice mini Head and shoulder chart pattern formation which looks like a good shorting opportunity. The only thing that kept me away from trading this is that it is a counter trend trade ie it is against the trend. I wanted to monitor this forex and see how it develop. Yes, it went down for 1 day and looks promising. However, on the second day, there's a bullish reversal which cause it to move up. So it doesnt pay to trade against the trend as you are exposed to higher risk and smaller reward.
Well, I am glad I didnt trade this and give it a miss.
1. Trade with the trend
2. Trade when there is a price action reversal with the trend continuation
3. Place SL on previous high/low candle (Limit my loss)
4. No TP. Let market decide when to exit (Let my profit run)