Stop loss for USDJPYNow , if you have not followed the story of this pair, USDJPY, please go read my strategy here
That is the big big picture, like looking at the forest from the helicopter view.
Now, let's go into the woods to see clearer. In the 4H chart, we can see that we are now locked in a range between 142.46 and 144.48 price level.
Assuming you want to short after you are convinced of my take on US dollar story and safe haven assets like Yen, Euro,etc , then where would you put your SL ?
25 May and 4 Jun - there were two resistance points where price fails to break above. Now, our price is going to revisit this resistance zone again. If you based on the high of 29 May candle as the point to place your SL, it appears too high. It was a false breakout on hindsight.
I am placing my own SL on the 3rd red candle around 145.433. I calculated I can short 0.8 contract with a 50 points SL and I would need to pay around 189 . This fulfils my 2% per trade principle based on 1000 capital.
With this in mind, to add on to my winners, I would have to make sure that I do not allow my emotions of greed and fear to magnify my SL nor increase my position size unnecessarily. This is very important. No matter how confident you think the market is going with you, anything can happen in the market and if you are WRONG, how much are you willing to pay? If you do it on impulse with pre calculation, then your emotions will take over especially if you get stopped out and wanted to do a revenge trade. Oh, tell me about it, so many times I have done that and lost money !
Hope this is useful for some of you.......
