Reversal similarities

Last week I made lot of profit (but also loss) trades. When daytrading, the frequency of trades is much higher than position trading.

I don’t want to analyze all the trades every single week. My intention is to select the most interesting ones and give you some unusual point of view.

You already know, that I am focused on technical daytrading systems. I am trading manually, with any EA strategy.

This is the reason, why I chose these two trades. The similarity of them is something I want to share.

Let’s take a look at the first one. Again, my favourite market, DAX.

 

This entry was quite obvious. Decreasing trend-line, in combination with strong resistance levels. As you can see, the target was set on a logical level too. Also combination of technical matters, this time support level and weekly fibonacci level.

The market didn’t reach the target, however I decided to trail my stop-loss, because 20 points profit was enough.

Next, similar entry I made on EUR/USD.

The similarity there is the reversal entry, after a strong market movement. As you can see on both screenshots, a strong movement preceded the entry.

In this case, EUR/USD broke the support level and went down very quickly. After the recover, I saw an opportunity to re-enter the market.

Trade was ended by activating trailing-stop. I can say I was quite lucky, because if I didn’t trail my stop-loss, I would get a zero from this trade. The final Risk Reward Ratio is around 1:1, which is fine for me.

Conclusion

As you can see, my RRR (risk reward ratio) is not too high in general. It’s around 1:1 to 1:1.5 in average. But, this is not a fault, If I combine it with high success rate, which is about 75% in my case.

 

In general, I would rather get every day a smaller profit, than once a week a huge one. It’s just because of emotional and psychical calm.