The Aussie has been going down under lately so my adjusted stop loss on this short EUR/AUD position got hit. Fortunately, I was able to lock in some gains even with this sharp pullback! In case you missed it, check out my initial trade idea and adjustments first.
A few weeks back, I spotted a falling wedge formation on the longer-term time frames and decided to hop in on what appeared to be a break lower. Price popped up a wee bit too close to my stop and I held my breath until the pair eventually gained downside momentum and breached the 1.4000 major psychological barrier.
After a bit of consolidation, EUR/AUD had another leg lower, this time to a low of 1.3626. I then rolled down my stop to the 1.3925 level to lock in some gains in case a reversal off this key support level happens.
As some of my dear readers pointed out, this 1.3600-1.3650 area is a pretty strong level and that a big bounce might be due. At the same time, political jitters in France started to wind down while risk aversion peeked back in the markets, causing EUR/AUD to move all the way back above the 1.3900 mark and hit my stop.
While I’m happy about being able to manage my risk properly and close this trade in the green, I can’t help but wish that I jumped out at a much better price. I probably should’ve watched the Fibs on the short-term time frames and exited when price broke past the highest correction level instead of waiting for it to hit my stop loss.
But oh well, I still caught a 155-pip win or a 0.15% gain on this setup so I’m not so bummed out. I did have a very small position size on this one since I had a wide stop, but I don’t regret setting it past 1.4500 because it saved me from getting wiped out on that initial bounce higher before bears took over.
As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.