Paper trade: NZD/USD shorted 1/6 size @ 0.73967, stopped out 0.7406 (-9.3 pips)

Took another swing with NZD/USD short last night. The RSI for NZD/USD finally eased off and headed down (Fig. 1). This is happening just below the resistance at 0.75 so the probability of a retracement is good. Because of the recent strength in NZD/USD and my failure to short it, I’m only using a 1/6 position size to minimize the risk.

I’ve also set a trailing stop at the recent top to keep it from running away. However, this turned out to be my mistake. The trailing stop was 54.8 pips. It turned out to be too tight and I was stopped out at by a wild swing just before a big dive (Fig. 2). Otherwise, it would have been a decent trade.

NZD/USD

NZD/USD, 3-hour

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2. Paper trade: Stopped out of USDCAD short @ 1.0640 for -67 pips, re-entering @ 1.0680
3. Paper trade: Stopped USDCAD short @ 1.0540 for +131 pips
4. Paper trade: USD/CAD long 1.07426, stopped out 1.06999 (-42.7 pips)
5. Paper trade: Stopped out AUD/JPY longs @ 81.3 (+7 pips) and 81.29 (-28 pips)