Just wanted to share how I was viewing this trade and where I got out.
I wanted to scale in all the way down the move up but wanted to do it at key Market Structure locations.
If you KNEW price was going to move higher, but didn’t know how far down it would go first, where would you place your entry?
Well – if you went all in – all out – then you may not have been filled depending on where you placed your order. If you placed it too high you would have experienced a lot more heat and also limited your profit potential.
By scaling in – you are able to get better pricing as price moves AGAINST you. As long as you’re right about the direction then it’s a good strategy. In this case we had Seasonality on our side, as well as juicy stops waiting above – and we also had Sentiment on our side as retail was trying to short heavily.
By scaling out – I was able to ensure that I locked in profit near prior highs just in case price reverted back to the entry points. I also was able to leave some on the table to capture the fat tails of the normal distribution. That is where true trading profitability comes in and can make or break a trading system.
Luckily for us, we have the odds in our favor anytime we take trades where 2 or more factors are aligned – Sentiment / Market Structure / Seasonality / Currency Strength / Fundamentals.
This was an easy trade and I hope you were on the lookout for taking advantage of this move.
The SentiFX Team