So much for a technical support! Thanks to the dollar’s relentless rallies, EUR/USD barreled through a major psychological handle before I can say “Trump!”
As I’ve mentioned in my trade idea, I was banking on the 1.0900 psychological support to ward off the bears especially after it had already worked a few days before. I was a long-term dollar bull, so I was only planning on taking profits somewhere near a falling trend line resistance.
Turns out, I underestimated the dollar bulls. Big time. Thanks to a lack of other catalysts, the Trumponomics-fueled dollar rally got extended with barely any pause. Heck, EUR/USD barreled through the 1.0900 support like bullet through toilet paper! As a result, I lost 150 pips (-0.25%) from the move.
Two things I learned from the event. First, I should not have taken the trade for the sake of having a trade. I should be more patient in waiting for a technical setup that coincides with my fundamental biases. Next, I REALLY should practice cutting my losses short. The pair might have fallen pretty quickly, but I still should have closed my position at the earliest signs that the 1.0900 support was broken.
Overall, a not-so-bad trade idea with pretty bad execution. On my next trades I will focus on developing the skill of cutting my losses without choking the initial trade setup. Got any tips on how I can work on it?