I posted yesterday about the multiple divergence patterns spotted (click here for post)… Eventually, I opened positions in AUDUSD and USDCAD…
Profits on 25th Feb
From the screen capture above, it can be seen that the first position was not profitable… I was stopped out at a loss of $700… After being stopped out, I felt that the divergence pattern was still valid, so I entered two more positions, 2 lots each in AUDUSD (bullish engulfing price action) and USDCAD (bearish engulfing price action)… These two positions were profitable with a total profit of $1845.39…
Frankly speaking, if I were trading with real money, I’ll probably not dare to bet so big when I re-enter; once bitten, twice shy… I guess I will only enter with one lot in USDCAD, maybe make enough for me to break even…. I still got a long way to go in training my psychology…
Nonetheless, I’m getting more comfortable with MACD divergence and price action trading in general… But although I have a fairly high percentage of winning trades, I know my risk management needs to be improved on…
- My risk/reward ratio for each trade is only about 1:1, if I hit a string of losses, or if the winning percentage falls below 50%, this system is going to be non-profitable…
- At present, I decide on the lots to enter based on instinct. I should actually calculate my lots based on my stop loss… else a single losing trade can easily wipe out profits on two or more trades….
