As with all of our trades we recommend through our forex signal service, we had a number of reasons in support for a sell on this one.
We identified a bearish pin bar reversal on the daily chart which closed on the 2nd May 2013 at a soft level of resistance marking a potential turning point the continuation of the prevailing downtrend this currency pair is in. This, coupled with a Fibonacci cluster and a host other factors prompted us to alert clients via our forex signal service as well as set up the orders on our own account.
We placed an order with the broker to enter us into the market at 1.2075 with our protective stoploss at 1.1955 and an open target in order to maximise our reward potential.
We were triggered into the trade on the 3rd May and it went in our direction over the course Friday which coincided with Non Farm Payroll (NFP) day, being the first week of the month. While the data was positive for our trade on Friday, it did not move far enough for us to justify moving our stop to break-even so we left it open over the weekend.
However, the following Monday and Tuesday saw the trade gradually turn against us and hit our stop for a loss.
Even though the trade had a had a reward potential of 15% + we actually celebrated the loss as being a necessary “business expense” before a string of winners in the flow of opportunity. After all, we had plenty of trades with high reward potential on our watchlist and this is something our clients have been informed about.