Update on yesterday’s USDJPY Short Trade set-up

Pls NOTE: The majors seem to be currently “sleeping:” nothing much to discuss in terms of bias.

Based on yesterday’s analysis, if you positioned yourself for the USDJPY Short trade set-up, regardless of the level you chose to enter your trade, your Limit Order would’ve been filled. The trade, however, turned out to be a very “sluggish” trade – in terms of it moving in our favor; but the good news is it offered us the opportunity to reduce our initial risk, while holding on to our primary profit target – indirectly, exponentially increasing our reward:risk ratio. Personally, I believe a very good trade-management skill is much better than a very good trading method: bad trade-management will turn the best of trading methods to a loser-strategy. That’s my personal opinion though; but I believed it is a view shared by most of us. Unlike my trading method, my trade-management approach is still a work-in-progress.

I’ll like to explain the few steps I took in managing the USDJPY Short trade:

On the Daily chart above, yesterday, though price convincingly broke the upward trend-line downward, it reversed sharply to close above it. That, to me, is enough cause for concern that price might be reversing upward.

On the H4 chart above, further confirming the Daily chart price action, price seems to be having a hard time staying below the upward trend-line as the last full candle closed on the trend-line – not exactly below it.

On the Hourly chart above, most recent candle pattern (a quasi “Railway-track”) suggests imminent price retracement upward – not necessarily a complete reversal; but in the light of the higher time frames, I decided to monitor the Short trade more closely.

On the 15min chart above, I drew a new Fibonacci from the most recent Hourly swing high @ 95.38 to the current-bottom @ 94.85 to identify a possible retracement level that might halt the current upward move of price. Price moved up to the fib 38.2% ret. @ 95.05 (very close to confluence of fib 50% ret. @ 95.11 and a previous Hourly swing low also @ 95.11), and then formed a 15min reversal candle (hammer).
With the “story” price was telling – keeping in mind the upward pressure on price on higher time frames, I moved my Stop Loss to 2 pips above the reversal candle (I also factored in my broker’s spread) when price moved downward by 9 pips in profit, which equaled to the same number of pips between the new Stop Loss and my Entry level. At the same time, I took off half of my position (I had 2 lots). At that moment, the worst that would happen was for me to end the trade in breakeven – which was exactly what eventually happened.

I hope the above explanation is clear enough. Sincerely, there’s no right or wrong way to manage our trades. That’s why I appreciate unrestricted conversation regarding trade-management.
I’m only trying to follow Warren Buffett’s hint: Rule number one, don’t lose money. Rule number two, don’t forget rule number one. Rule number three, don’t go into debt.
As I said, my trade-management approach is still a work-in-progress. I’m beginning to accept the fact that if a trade would earn me maximum profit, it should do it without giving me unnecessary hassle. I only need a few trades with maximum profits to be profitable – as long as I keep my losses very low in an informed manner.

I apologize for this very lengthy explanation.