NZDJPY Long Trades 04 May 2021: -1.0R Loss and +2.2R Profit

I made two NZDJPY trades on 04 May 2021. Trade No 1 was a loser and Trade No 2 was a winner.

REASONS FOR TRADE:

Daily chart: NZDJPY was in an uptrend channel making higher highs and higher lows and its 10-day MA was angling up.
4hr chart: NZDJPY was at support zone with the stochastic %K at oversold level when the trades were made.

See NZDJPY Daily and 4hr charts below.

NZDJPY Daily and 4hr charts

TRADE No 1:

ENTRY:

My buy order was filled at 78.10 on 04/5 17:11hr when support zone 77.976-78.112 was tested.  My stop loss was placed at 77.85 and take profit at 78.90.

EXIT:

The support zone did not hold, price continued to decline and my stop was hit at 77.85 on 04/5 19.42hr. 

I lost -25 pips on this trade for a -1.0R loss.

TRADE No 2:

ENTRY:

The reasons for the trade was still valid even after I was stopped out for Trade No 1. I re-entered at a lower price at 77.749 on 04/5 20.38hr when support zone 77.645-77.784 was tested. This was a stronger support zone since it coincided with the uptrend line. This time the support zone hold and price moved higher. My stop loss was placed at 77.50 and take profit at 78.90.

EXIT:

I raised my stop loss to 78.30 when NZDJPY hesitated at its downtrend line(purple colour). My stop was hit at 78.30 on 5/5 14.16hr.

I made +55.1 pips against an initial -24.9 pips risk for a +2.2R profit.

LESSON LEARNT:

I could have made +115.1 pips on Trade No 2 for a +4.62R profit had I not raised my stop too early. I was too eager to make at least a 2R profit to ensure that I covered for the loss on Trade No 1 when I made that decision. 

My trading plan was to apply trailing 1 bar stop only when price has moved more than 75% of the way to the take profit target. This was not the case when I raised my stop.

Disclaimer:

Trading and investment involves risk, including possible loss of principal and other losses. I shall not be responsible for any losses or loss profit resulting from trading or investment decision based on my posting and any information presented in this blog.