This post is just a follow up to the GBP/USD trade that I have been following as an example. We can see here that the $USD has given an uptrend continuation and the uptrend in the GBP ended at the same time. Lets have a look below what happened to my trade.
As we can see here on the GBP/USD weekly chart the downtrend was still intact but the weekly MACD has crossed up. Bearing in mind that the GBP was quite strongly bid and the $USD was flat, I had my stop quite tight just above the kumo.
As is often the case in trading you will be stopped out of a position only to find that the pair turns back down. That was what happened here. I had built up a large position by adding to the trade as the downtrend unfolded. I was closed out of all of those trades at a very nice profit at the horizontal line just above the kumo. Even though the downtrend was still in play I did not want to be caught in a counter trend move. We had a move higher and then the downtrend resumed. Thats ok, I am happy that I stuck to my trading plan. That is most important and I also picked up a very nice gain so you can't be unhappy with that. The best part is that I didn't take a long entry on the kumo breakout because I knew the weekly downtrend was still in play. What did I do i this case? I just re-entered a short postion. No big deal. I managed my risk and acted according to the market conditions. There is no point saying I should have stayed in the original trade. Never be mad at yourself for locking in profit.
If we have a look at the 4hr chart here below you can see my re-entry on the daily chart corresponds with the break below the kumo on the 4hr (The red arrow is my short entry). This is just like how I entered the initial trade back in August 2014 using the weekly and daily chart. I will be following this trade on the smaller time frames for now because I believe this could be a sideways consolidation on the weekly chart.
The point of this post is just to show that real trading does not always go the way you want it to. The important thing is to always stick to your trading plan and have no regrets about that.
I hope that somebody reading this one day will get what I am showing here.
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