FXSCOPE Trade #90

FXSCOPE JOURNAL TRADE #90

OID: 13231786

Start Time: 2016-05-02 23:34 (GMT+1)

Currency pair: AUD-USD

L/S+P: Long @ 0.76713

Technical RFE: Positive RSI above the 50 M15-H4. Clear bullish trend >H4. Pivot Point MA:s still pointing up after recent bullish crossover. The price is now above both the M15, H1 and the H4 Ichimoku clouds and the Chikou span signals bullishnes.  The dollar still very weak. One potential obstacle though: a semi-important bearish trendline (yellow line). We are in fact in the 2nd pullback in a downward move.

Risk in pips: 65.5 (but used Break Even EA after a few pips gained)

Reward in pips: 67.7

Risk/Reward: 1:1.03

MM Risk: 0.63%

BE at: no BE

ITM: No. Overnight trade.

COMMENTS: When trading the lower time frames, it is always risky to leave a position open overnight. But, this time I used a very small position-size and thus risked very little (0.6% of my initial account balance). Great. I even took extra pre-caution by activating a Break Even EA after a certain amount of pips gained. It turns out that the price reached that limit and my Stop Loss was switched to break even. However, the big mistake here was that I left an AUD position open when the Reserve Bank of Australia had a scheduled Interest Rate Decision and statement at 06:30 in the morning. This almost always means a huge market reaction, possibly a gap, and thus potentially great slippage on your Stop Loss (in my case as much as -65 pips). This trade was in other words from the outset worse than a coin flip, and an example of HOW NOT TO TRADE. Always plan well, always check the Economic Calendar.

Remember:
Important economic news events could lead to gapping and great slippage on your manual exit or Stop Loss. Always take this fact into account.
Always check the Economic Calendar before opening new positions or leaving positions open overnight.
– Both ‘Gapping’ and ‘Slippage’ are very important to recognise as you can easily blow your account if this happens when/if you trade with high leverage. However, some brokers offers a so called “guaranteed stop” as a premium service.

SCORE IN PIPS: -65.5

AUD-USD Overnight Trade
TRADE #90 – (Yellow line)  – AUD-USD. great price-gap because the Reserve Bank of Australia’S interest rate cut.