Here is an update on the EURAUD trade that went rogue on us (1hr timeframe).
Turns out it was a contracting correction. Contracting corrections are very hard to forecast cause we're always assuming the 3d leg of the correction is at least gonna as far as the first leg, especially when the bigger structure points in the same direction. The key factor here is looking at the macd: if it crosses back in the opposite direction the trade is invalidate and the chances of it being a contracting structure are extremely high or in any case too high to keep the trade open regardless.
Now, if we were wrong about the sell, we would be certainly right about buying this, but given our reduced loss (0.5%) and given the new risk to reward which isn't very convenient as the moment it breaks the top it can reverse, we're going to skip the buy and wait for the next sell.
Turns out it was a contracting correction. Contracting corrections are very hard to forecast cause we're always assuming the 3d leg of the correction is at least gonna as far as the first leg, especially when the bigger structure points in the same direction. The key factor here is looking at the macd: if it crosses back in the opposite direction the trade is invalidate and the chances of it being a contracting structure are extremely high or in any case too high to keep the trade open regardless.
Now, if we were wrong about the sell, we would be certainly right about buying this, but given our reduced loss (0.5%) and given the new risk to reward which isn't very convenient as the moment it breaks the top it can reverse, we're going to skip the buy and wait for the next sell.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.