This trade looked very promising on paper, but in reality, it didn’t turn out as planned. The issue was that I set my stop loss (SL) at break even or slightly above. As a result, it was triggered, and the trade closed at the next available market price. Typically, this matches my SL price exactly, but this time, it didn’t, leaving me with a 5% loss on the trade.
What could I have done differently? First, I’m not very familiar with this asset pair. It’s possible that it exhibits more volatile movements, which I should account for when trading. Second, I could have left the trade as it was and avoided moving my SL to break even. However, I was very tempted to adjust it because my trade’s risk/reward ratio (1.58) wasn’t ideal. Determining an optimal ratio remains a challenge for me.
Additionally, I might reconsider trading on eToro. There could be platforms that offer better tools for managing risk. That said, I’ve been generally pleased with eToro. Over the past two years, I haven’t experienced any issues. Even with this trade, I reached out to customer service, and they responded quickly and transparently, explaining what went wrong.
In conclusion, I think I’ll focus on improving my risk/reward ratio to at least 1.8, and ideally 2, to better manage future trades.
The USD/CAD pair is currently bouncing off the 0.786 Fibonacci level. If this bounce holds, I expect upside movement toward the red (0.71) and possibly the green (0.618) Fibonacci levels. However, zooming out reveals a daily downtrend, confirmed by bearish candle patterns such as lower highs and lower lows.
Since I avoid trading against the daily trend, I will wait to enter a trade until the upside movement is exhausted. To determine when the downturn occurs, I will monitor lower timeframes regularly.
This week I’m focusing on AUD/CHF. I am looking to enter a short. However, I am currently waiting if a retest might happen to a little bit below the EMA50. I order to check if this retest is happening, I will monitor the candle behavior at lower timeframes (4hr and 1 hr)
This chart catches my attention for several reasons. First, the candlestick behavior signals a potential downward movement or trend. Second, the price is currently trading below both the 50-day and 200-day Exponential Moving Averages (EMAs). Third, when zooming out to the three-day chart, a bearish market shift is evident, with the latest bearish candle fully engulfing the previous one.
However, despite these bearish indicators, the downside potential may be limited. The three-day trend could suggest that this is merely a temporary pullback before the price resumes its upward trajectory.
UPDATE (26th of May 2025): I have entered the trade at around (0.53467 CHF).
