H&S Trade Diary: 1- 0

March 4, 2016

H&S Trade Diary: 1- 0
The Head and Shoulders strategy outlined on Wednesday is off to a good start:
+2.9% / 195 Pips!

First trade was on USDCNH (US Dollar v Chinese Yuan) – I noticed a Head and Shoulders pattern on the four hour chart:


Price was already below the ascending neckline, so I drilled down to my hourly chart to look for a close:


The breakout had already occurred – there was an hourly close below the neckline at 11am Sydney time. After calculating stop loss and target, I entered short at 12:42 PM. Entry level was 6.5440, with a stop loss above the right shoulder at 6.5570 and 1.5x take profit target at 6.5245.

The trade reached our 1:1 break even trail level over night – I trailed stop to break even at around 6am this morning, but trade was already very close to hitting target. This was a great trade – target was hit in under 24 hours with minimal whipsaw.

Points Of Interest:
Stop could have been a lot tighter – trade only ever moved 40 pips against entry point (stop was 130 pips). I’ll continue to observe future trades and see if there’s a pattern there, or whether this was just a stroke of luck.

Score Board:
OG H&S: 1
Market: 0

Tune in for the next trade … Good to start things off with a winner, but we’ll need to win more than 40% of our trades for a profitable strategy!

Oscar Goullet – @FXtechs

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