nzdusd-h4-20161117
NZDUSD H4, Reaching Bottom of Major Rising Channel
nzdusd-m15-20161117-entry
NZDUSD M15, Two Waves of Retracement Completed at FR88.6%

Technical Analysis:
Just after selling NZDUSD yesterday, it fell further. But just before reaching the bottom of the major rising channel, the price went for a retracement and completed another 2 waves of retracements to sell again.

As seen in M15 chart, the price retraced twice and resisted at FR88.6%, signaling for the price to resume depreciation, probably the last wave as this will finally bring it to the bottom the major rising channel.

Market Sentiment:
The kiwi weakness may start to weaken and most likely will after the last wave of depreciation. The dollar has rallied extensively and should be taking a back seat soon while also having USDJPY reaching 110, a very strong psychology level that embodies a big chunk of taking profits. This is the final wave, or it has already happened.

nzdusd-m15-20161117-trading-plan
NZDUSD M15, Trading Plan

Trading Plan:
Short with full risk. Stop loss placed at  20 pips above the swing high of the previous wave of depreciation .

Trade was executed within market hours and  10  hrs before the next major news release.

Take Profit 1: 0.7045 (key support level and FR88.6% of retracement channel)
Take Profit 2: 0.7016 (FR127.2% of retracement channel)
Take Profit Final: 0.6995 (bottom of major rising channel and near FR161.8% of retracement channel)

Initial follow-up plan: Once the price breaks into the support zone from 0.7044 onwards and reaches FR127.2%, close half position when a pullback happens. If the price retrace furthers and breaks above the top of the retracement channel, cut loss fully.

Modification:
(Refer to section ‘Learning’)

Trading Result: Gain 2%NZDUSD.M15 20161117 result.png

Learning:
The initial cut loss, when the price breaks slightly above the swing high of the retracement channel, was good as I followed my trading plan on my cut loss policy. The price did break higher and closed above FR88.6%.

Followed by the re-entry, it was acceptable because after the price started to fall again, it broke below its previous swing low and retraced to a resistance level.

Then a partial take profit was made to close the 1st trade as it was seen supported at the same level of a previous low, and also because it was after midnight already. That’s a good practice always to avoid disappointment the next day while still leaving some position running.

However, the last trade closed was a mistake and the price fell further shortly after the trade was closed. Firstly, there was only one reversal candle and the next candle has not fully formed. Secondly, this abrupts my trading plan to take profit at a much better price, resulted in the loss of potential profits. It is not even the first TP level and all trades were closed.

I was affected mostly by psychological reason when I saw the capital was back to the same amount as before the loss on EURJPY trade.