This was definitely one of my better executed trades recently. Here's my logic for the entry and exit. As shown in Fig. 1, at the time of entry (marked by the faint vertical line on 10/23), NZD/USD made a negative divergence with a higher price and lower RSI. There has been a series of false alarm on the RSI overbought entry signals. However, 0.76 is an important resistance because it is where the massive downturn started in July 2008. I timed my short entry based on Figure 2. We made a lower high just below 0.76 and within the previous channel. Then I waited for the current downtrend to break the ascending support line to place the order. The order was subsequently filled on Sunday night during the Asian open when I was sleeping. Frankly, I wasn't too happy at first because my fill price was right at the low. I kept my position anyway and allowed the stop to work for me. This is probably the best decision I've made with this trade. By remaining patient, I didn't succuum to micro-managing my position like I've done before. With regard to the exit, I took profit at my target at the ascending support shown in Figure 1. That support line worked well for half of the year in this rapid ascend of NZD/USD. So I didn't want to risk a bounce by taking profit at this point. However, NZD/USD has traded down to 0.7260 as I'm writing this. Time will tell if the exit is a good one or that I should have left half the position in. The net gain for this trade is \$79.82 because I mistakenly entered a full position instead of half as I should. Here are the R/R that I saw when I entered this trade. Position size: 100% Entry: 0.7520 Stop: 0.7600 Target: 0.7300 Reward / Risk = 220 / 80 = 2.75 \< 3. I thought I was entering with only a 50% position size because of the R/R not meeting my criteria. However, I read my own forex position sizer wrong and gone in with a full position. Luckily, things have worked out. But I have since updated my position sizer so this won't happen again.
[caption id="" align="aligncenter" width="580" caption="NZD/USD"]NZD/USD[/caption]
[caption id="" align="aligncenter" width="580" caption="NZD/USD, 3-hour"]NZD/USD, 3-hour[/caption]