Each week I send my weekly watchlist to my community. This is CHFJPY from last week’s watchlist. Although I use multiple entries I will only be showing how new traders on my team following the rules of the book should take a single entry and how the trade should be managed.
For this one there was a 126 pips profit on this trade there’s knowledge to be had from the management of this trade so let’s go.
Below is the setup that was sent to the team. Please follow along to see how the trade was taken and how it was managed.
So you may realize that the entry is h4 timeframe and what I normally do is manage on the h1. H1 shows clearer waves so you can manage the trades better especially with volatile pairs.
Now above is a shot of CHFJPY H1 we can see clearly where the sell stop would’ve been triggered below the low marked with the orange circle. Price broke the low and reversed then broke it again then reverse then went down. Please follow carefully, at the low after the orange circle that is where the sell stop was triggered and the Stoploss would be where the grey “Stoploss” is.
Another critical thing to make note of is the strong resistance/support area marked with the yellow horizontal line. The bearish trendline we used to manage the trade is also paramount in managing the trade. So after making a lower low and is obeying our bearish trendline perfectly. So we adjust our stop-loss to the next lower high formed.
Another key thing to understand is when to use which trendline to manage a trade, but as long as price is close the trendline you should use that one.
Price fell steeply moving away from so its safe to use a minor trendline to manage the trade. So price created a new low and a lower high which will be our new point for the stoploss. So our stop-loss should’ve been at 26 pips profit.
So price made another low and also another lower high which means our stop-loss should be adjusted. If you look closely to the final placement of the stoploss before getting stopped out you will notice that price did make a lower low which validates the previous high as a valid high for stoploss. So comfortably that would be 126 pips profits. Many see stoploss as a bad thing but to us stop-loss is where we take profit. So if you followed the rules from the book you could’ve easily won 126 pips by managing the trade using my trendline technique.