Wash and Rinse

USDJPYm (30m)

This is a typical Wash and Rinse pattern (Double Top in western) where the price “re-tested” the previous resistance. As you can see, the second long shadow has just tested the previous resistance (100.85) and moves 1 pip higher to 100.86.

My Entry
It was based on candlestick pattern. I spotted the Three Black Crows reversal pattern (pattern in box). I went short at the next candle when it opened gap down and moved lower. My entry price was 100.33. My stop loss was at the previous high (53 pips higher than my entry). My target profit was 99.56 (77 pips lower than my entry).

Analysis
After the Three Black Crows, piercing pattern was observed. Failed reversal pattern will continue. True enough, it consolidated for 4 hours before the Abandoned Baby formed. A strong reversal warning was given. Next, the bearish Harami pattern was added in as confirmation that the uptrend has come to an end. It was followed by a major conviction (long bearish candle).

My Exit (My Mistake)
In my opinion, the rickshawman was a profit-taking candle. Its shadow was stretched to “collect” the “thick” stop-loss. My stop-loss was placed at 100.86. So, it was “taken” too. I should not have placed the stop-loss there at the first place.

My Lesson Learnt
I should have placed my stop-loss at previous (x2) high at 101.09. However, it was a bit much for me (76 pips ≈ US$75) as my target profit only around US$76 (77 pips). Alternatively, I could place at previous high + 1 candle, which is at 100.86 + 0.10 (average bearish candle) = 100.96.

Journey Rekindles

I commenced my trading path in by trading Forex, in Oct-2008, the period where the stock market crashed tremendously. I was totally a blur newbie at that time. I opened a real cash account with local broker and traded solely based on my bloody "gut feel". Needlesss to say, "losing trades" were my return. My account shrunk 20%. I blamed on bad luck.

I knew, I was gambling and I could not trade in this way. Then, I sought help from my uncle, a savvy and experienced trader, to receive a proper education on Forex. I got to know some useful indicators and charting. I also started reading mountains of books in Forex Technical Analysis, Candlesticks patterns, Fibonacci and etc. By pointing the blame to the costly commission of my first broker, I opened another account in another broker which was commission free. I thought I was to attack the market again... Due to the beginner's luck, I was able to gain a 'two-week' constant small profit. In the following week, I suffered 5 consecutive days losing trades and wiped out all my previous profit. I blamed on market. I started getting anxious and traded emotionally by compromising my stop loss and exit plan. I In a week more, my new account shrunk 30%.

I got nothing to blame again... I got proper education from my uncle. He repeatedly reminded me to put stop loss and not compromising it. I did not follow. During actual trading, I let my emotion overrode. I have read a lot of trading books but I applied none of the techniques. I began to realize another extremely crucial trading factor, psychology. I knew I needed to have a "pause" in my trading journey to obtain a complete trading education.

I went back to my uncle again. He recommended me to read a book called "Secret of Millionaire Investor" and introduced me the 'Wealth Academy Trader' -- a proper financial education, trained by a Singapore top coach, Conrad Alvin Lim. After reading Conrad's book, I realized that there were so much knowledge I still need to acquire before qualifying myself as a "trader". I attended Conrad's preview and signed up for the WAT (Wealth Academy Trader) in Jan-2009. I began learning everything from ground zero again.

In WAT, I built my foundation in trading. I learnt the proper trading psychology. I learnt how to use different financial instruments such as options, futures, Forex and etc. I learnt a solid Technical Analysis and reliable Fundamental Analysis. I learnt money flow. I learnt how to enter and most importantly, how to exit. I learnt trading defensively. I learnt "trade to trade well".... These are the things which I have neglected before. Now I realize that how stupid I was previously. My savvy uncle spent years to master the art of trading and I thought I could be like him in months??? You see how ridiculous I was.

3 months passed. After much hard work, I am now a graduate from WAT. I now restart my trading journey over again. In other words, my trading journey rekindles. I commence by practising in paper trading. Not until I've finished polishing my trading skills in paper trading, I will not trade the real money.

Thank you uncle, without you as my mentor, I won't get back to the right track of trading. Thank you Conrad, without you as my coach, I won't get to know the real art of trading.

I am a trader now.

2 Losing Trades

SPY

Gap down from the previous day. Lower low was observed. Downtrend was noted. Standard 6 shows convergence even though the MACD shows a bit of time running out. Applied Fib found that the downtrend retracement is at COP 61.8%. Short SPY at 82.64.Stop loss at previous previous high at 83.2589. Target profit is at 1.618 XOP at 82.04. MRE analysis was valid ad at 10.30am, the gap was not closed. Similarly at 1.00pm, the gap is still not closed and lower high was observed. MW news released: Sun shares plunge on reports of IBM deal collapse. Big Blue's offer of $9.40 per share rebuffed by Sun board, reports say. Also, high tech sector plunged. Hence, SPY is expected down today.

Actual Outcome

Losing trade

What went wrong?
Could not find any news. Moreover, this is SPY (index ETF). It can only be moved by Interest Rate and Earnings. Earning seasons started from this week (week15-20). The only reason was self-fulfilling prophecy (Apr is the most bullish month of the year). Also, the stop-loss of previous (x2) should be based on day candle, not less than that. If I used the day candle of previous (x2) high, I won't be stopped out. Instead, I should have earned a profit.

EUR/USD

Losing trade
After the Italy earth quake, EUR/USD saw a downtrend. Fid analysis provided a beautiful trend. Both XOP and XXOP were tested.I performed candlestick counting technique.

What went wrong?
I was mistaken as I counted the Doji as the first candle. The Doji supposed to be discounted. However, the candle-counting still valid as the 5^th candle reversal was observed.
My loss: $40 cut loss.