NZDUSD 02/09/10

Entry Sell: 0.71632
T/Profit: 0.70240
Stop Loss: 0.7200 (2/9/2010); 0.71632 (3/9/2010)
Trailing Stop: 37 Pips

Potential Loss: 37Pips (2/9/2010) >> 0 Pip (3/9/2010)
Potential Profit: 139 Pips

Reason for Entry: Technical - 5th Top( Since 2 Feb 2010).
Reason for Stop Loss - risking 0.12% of the account (37pips estimated to be $3.7>> $3.7/3000*100) (2/9/2010); The only reason is “free money for a trade” should I look at the pattern? I don’t want to get whipped lashed.
Reason for Target Profit - Next Resistance line 0.71632
Reason for Trailing Stop: Less than the potential profit. It seemed the movement is not so volatile. Maybe I should start measuring how much it moves per day? The range of pips?


Results:
Profit = 0  (stopped out)03/09/10
Loss = 0



Thoughts:

(3/09/10) – I did not use pending order (sell limit) at 0.71751. The reason is because (1) the price has already forming a resistance at 0.71751; (2) the 5th top since 2 Feb 2010; (3) My gut is telling me that it won’t go back up again, it will trend downwards; (4) The Stop loss pips including the entry point is only 37 pips, and the profit is 139 pips.

The only thing I regret is I should have put more contracts. I should have put 0.05 contracts instead of 0.01. It is because this is a good bet/setup. It is worth it to make the trade.


(6/9/10) - I felt that I have made the right decision to bring down the stop loss to a break even point. The price went up after that and broke the resistance line. This will be another good opportunity. However, I am not too sure whether I should short or long. I will have to  re-analyse.


Lesson Learned:


1) Before put down the contract, look at the setup first. Good bet>> increase the contract. How do I quantify for it?? How many contracts should I put in? I don’t want to blow up my account. Maybe my max trade is 2% for a very very good trade?

 For this trade, I should put it 1% I think. I have to think and discuss it with a friend more.