We will have some trades that will get stopped out. The key is the post analysis and to learn from them.
Post Analysis:
Here is what the chart looked like when we entered the trade.. We would have like to get in sooner but everything looked like a “healthy” bearish trend. Therefore, our entry criteria was set and entered.
Below is the weekly chart. When we first entered the trade, we looked at the weekly (“big picture”) and realized that price would have to go back to equilibrium i.e. Kijun Sen. However, we never drew the profit target on our chart based on the weekly Kijun Sen. If we did, we could have exited at a profit target of .9058.
Below is the chart with the profit target we should have exited out at. Our target would have reached it’s value 2 days later.
Result: My mistake was when I looked at the bigger picture, I notice price would have reached the weekly Kijun Sen. I assumed that the Tenken Sen on the weekly would have traveled with price so a Kijen Sen/Tenkan Sen bearish weekly crossover would occur. However, that did not happen. Instead the Tenkan Sen lagged behind. Based on this assumption, our profit target was wrong. It should have been the weekly Kijun Sen. Once the profit target was reached, we would analyze the trade again for another possible trade. This lession is well learned.
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