05/20/2009 GBPJPY Trade

Written by Hugh, on May 26th, 2009

This was another TriScreen but with a big stones early entry.

Short 1 (400) GBPJPY @ 4968
Stop @ 5010 (-42)
Target N/A

It was late in the day and I saw that price was bouncing a third time of a significant resistance point. I decided to enter on what Chris Lori calls the big stones entry. I felt that was a good strategy because there was significant MACD divergence and a TriScreen would come up sooner or later.

A big stones entry is when you fade a support or resistance point as price in moving to that S/R level. This primarily has the benefit of giving you a better entry price and allowing you to set your stop tighter. The downside is that it may be very uncomfortable to go against the market when there is a boldface candle staring you in the face.

So I entered early and decided for the TriScreen to trigger before I entered a second position. My confidence level was 8/10.

Click above for larger image

The TriScreen fired off and I entered a second position:

Short 1 (100) @ 4863
Stop @ 5010 (-147)
Target N/A

As you can see, entering early allowed me to set a significantly tighter stop and thus take a larger position.

I opened my computer in the evening to see a huge price drop so I decided to watch this pair carefully. I exited the second postion @ 4744 (+119 pips). Price started moving up so I decided to take of half of the original position @ 4804 (+164 pips).

I then moved the stop on the final 200 units to 4963 (+5 pips). The market moved up and took out my stop at +5 pips.

Overall, maybe I should have exited more of the position earlier but I think I did a pretty good job of managing the position.

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