Good day traders!
Took a trade today based on candlestick reversal signal, a bearish looking doji on the H4 of the USD/JPY chart was spotted. Clapped my hands with glee thinking that this is a no brainer trade that will make me some yummy pips.
This trade was as bad as it could ever get. The price never went below the closing price of that doji for nuts and went straight up after mere seconds touching that point. It is sheer frustration for me and my Stop loss was hit with a 40 pips loss just above the 82 level, at 82.1.
What is the learning point for this trade? Well, always remember that candlesticks do not cause reversals, they just add to the probability of a trade. You need to use several strategies together to make it a high probability trade. In this case, I feel that I should have given priority to the fact that the overall chart patterns look surprisingly bullish. It also reminds me that one should always have a stop loss so that when these kind of trades happen, we as traders can still trade another day.
To your trading success!
Triple Threat Trader
Singapore Forex Traders’ Blog signing out!