Image: Oanda
So today I am going to share a trade I did yesterday.
Looking at the yellow oval region, it is not difficult to see the volatility of forex trading.
I have place a stop-in short below the recent low as everything sit in nicely, with the exception of the chikou span, where were in the middle of the cloud.
Volatile price action soon after, you could see the short position being stopped out as the price action crossed above the ichimoku cloud.
What was more devastating, the price action made a reversal, crossed below the ichimoku cloud low.
The most challenging part of this trade was the psychology then. Not easy to placed that short position in again as you could see the area mark blue circle.
The important thing then is to look at the ichimoku-chart AGAIN. Chikou span is going to cross the ichimoku cloud lo. As I always said, the chikou span crossed below the ichimoku cloud add confidence to the trade. The challenge is always on the psychology.
I did pull my trigger, added a short position.
As I waited out, it was a winning trade.
I only managed to recover 75% of the loss from the earlier trade.
Cheers
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