I may have taken a hit on this EUR/CAD short setup but I’m walking away with some lessons learned. If you’re wondering what I’m talking about, make sure you read my initial trade idea first.
I thought I spotted a legit double top pattern on the pair’s 4-hour forex time frame so I hopped in a short position when that neckline broke. Price clawed its way back up, giving me a bit of a scare, but I held on and the selloff eventually resumed.
At that time, Canada was about to print its latest jobs numbers so I decided to close at market then just re-enter if the actual figures come in stronger than expected. At the same time, I also trailed my stop down to my original entry at 1.4550.
Price popped up higher once more, hitting my adjusted stop loss in the process. Since I gave up some pips between my decision to close early then re-enter, I wound up with a loss on this trade even if my position was stopped at my initial entry.
In retrospect, I probably shouldn’t have re-entered the trade at all even though the Canadian jobs figures beat expectations. Either that or I should’ve put in a much smaller position so as to not erase my previous wins and even end up with a 0.04% dent on my account. Talk about risk management gone wrong!
Another way I could’ve handled this was to be more aware of that descending channel that was just forming. That way, I probably would’ve kept my stop wide or re-entered right at the channel resistance for a better R:R. Oh so many lessons with 20/20 hindsight! Speaking of lessons, do share your thoughts on my Q2 2016 performance review as well.
Got any ideas you’d like to share with me for this week?
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