YEAR END TARGET ON TRACK DESPITE RECENT LOSSES

After a strong start to the year, 2 recent losses have led to a decline in the Rate of Return from the Methodology for 2016. Having been up by 46%we are now up by 23% following tese recent results. Despite these setbacks, however, the Methodology is still on track to reach at least 100% by the end of the year - the goal of my Subscribers.

One of these losses took place on the CAD JPY on April 12th last month. This led to a loss of 119 Pips.

RATE OF RETURN OF METHODOLOGY

The trade was taking place within a Pennant Consolidation that was being formed on the Daily Chart. The Support Boundary was already formed and we needed a 2nd Resistance Point to complete the Resistance Boundary and the overall Pennant.

DAILY CHART - ENTRY SIGNAL

The Breakout Candle below the Outer Uptrend Line provided the signal to continue the bearish movement towards Support. The Breakout Equivalent of the small Pennant was set as the trading target.

Entry took place using the Stop Loss of the Pennant of the 4 Hour Chart and the target set to just above the Breakout Equivalent to capture 200 Pips.

4 HOUR CHART ENTRY SETUP

However, instead of continuing bearish, the market reversed sharply to take out the Stop Loss, leading to the 119 Pip loss.

DAILY CHART - TRADE LOSS

The reason for this loss had to do with the Daily Candle Signal itself. I "misread" this as being a Normal Candle - which we trade - but in fact it turned out to be a  Large Candle - which we avoid trading. 

As you have seen in the Trading Manual and my Videos, Normal Candles usually provide successful trades once correctly identified. However, if the candle is too large (Large Candles) they are normally associated with volatility and reversals that lead to losses. In most cases, they can be easily distinguished but in this case I misjudged it. 

The 2nd trading loss occurred during that same month on the AUD USD. This led to a 58- Pip Loss.

RATE OF RETURN

The trade was a breakout taking place from a Range Setup on the Daily Chart as the pair was expected to continue rallying after hitting a major Outer Uptrend Line.

DAILY CHART - OVERALL MARKET SETUP

DAILY CHART - RANGE BREAKOUT 

Entry took place using fast uptrend that was formed on the 4 Hour Chart as the pair broke out from the Range.

4 HOUR CHART - ENTRY SETUP

Instead of continuing bullish, the pair lost its Bullish Momentum and began to pullback, leading to the loss.

4 HOUR CHART - TRADING LOSS

The reason for this loss had to do with the change in market direction. Instead of continuing higher, this rally was simply a temporary bounce ahead of a break of this barrier that eventually took place.

DAILY CHART - REVERSAL

Sudden changes in market direction are par for the course when it comes to trading. We simply have to take them on the chin and move on to the profitable trades.

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Your Mentor

Duane Shepherd

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

shepherdduane@gmail.com /(876)-3825648

Twitter: @WorldWide876

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