Time to cut losses! With EUR/AUD bouncing off the previous lows and recent economic data suggesting a change in the fundamental outlook, I closed this short trade early. Make sure you take a look at my EUR/AUD trade idea first before reading on!
Apart from news that the massive copper price slide dragged the Aussie lower, the formation of a double bottom pattern on the pair’s 1-hour forex chart also convinced me to cut losses. After all, this could wind up weighing on Australia’s export revenues, which might then lead to economic weakness later on.
I’m a bit bummed out that I wasn’t able to lock in any gains around the 1.4400 major psychological mark though, as this is pretty close to the previous lows anyway. I might’ve been feeling greedy in aiming for a 1.5:1 reward-to-risk ratio when setting up my trade instead of being content with just a 1:1 return.
How do you think could I have played this one better? Think it’s worth switching biases and going long at this point?
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