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!”
Trade Setup: Simple Support Play on EUR/USD
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?
Here’s my Q3 2016 Trade Review and Reflections
Read the 5 lessons I’ve learned in 2015
Read the risk disclosure!
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.