Not too long after adjusting to lock in and further maximize my profit, risk aversion hit the markets, which sparked a quick rally in EUR/NZD to knock me out of my trade.
Risk takers were in sell mode during the U.S. trading session on fears that global economic data isn’t as good as previously thought, and that risk assets were a little frothy. In cases where price is driven mainly on market sentiment the Kiwi tends to be treated as the “risk asset,” and it showed in EUR/NZD and other Kiwi pairs. In the span of a couple of hours, EUR/NZD rallied almost a full 1.00%, or 155 pips, taking me out at 1.5850.
1st half position: +200 pips
2nd quarter position: +10 pips
3rd quarter position: -93 pip
Total: +82 pips avg./ +0.26% gain
I may have been a little too aggressive in trying to increase my position size because I went so small to start out with. But on the other hand, if we are heading into a risk off environment, then getting out now might be the right move.
In terms of process, I think I did the right thing with that last adjustment. The market did break below the previous swing low and with the potential ECB rate cut fuelling strong momentum to the downside, selling on the break of 1.5770 instead of waiting for the retest was the right call in my opinion.
Overall, I should have been bigger to begin with, so that’s the one adjustment I’ll make going forward, which is okay since my stops tend to be pretty huge and that I rarely hit them. We’ll see how that goes…thanks for checking out my blog and stay tuned!
What do you think? Do you think my trade management could have been executed differently given the information and conditions of the market? Please leave a comment below!