At first I assumed it would be an ascending triangle, and traded the break out. False break out of course, if it would even constitute to that.
Let’s talk about the highlighted area. Where the range was clear and identified on the weekly and daily. It would be huge movements and trends on the daily and 4H charts.
Missed out on the first down swing after it hit resistance. The presidential election just made it happen faster, it was going to happen anyway. But I missed it because I watching the DJIA and losing money while doing it.
Then there was a consolidation. A flag pattern in the middle of the range. Of course in hindsight it’s easy to say. But at that time, that was my analysis as well. And I did short it… too early at the break out. And got stopped out.
I started wondering if it was a pullback or did the whole big move just reverse. Impatience and not letting the market do its thing is indeed costly. When price actually broke out of consolidation with a large bearish candle, I missed it…
I thought I was right. But what’s the point of being right but not making any money out of it. Could have joined the trend, but did not want to chase the markets. Next area of value to trade from would be the support at the bottom of the range then.
Mistakes made seem to get bigger at this point. Or maybe in not wanting to make the same mistake previously, another one was made. Wrong interpretation of the context and held back by psychology. Price never even made any sort of false break of the support.
It bounced on it immediately. And I thought that’s impossible. There should be a range first, then I’ll trade the break out of that range. There was a tiny one, but I thought it had to be bigger. Fool.
Price bounced off with the swing registering ADX 39 and I was waiting for a proper pullback, one that never came. The 10 and 30 SMA did create a TAZ to trade within though. I missed that, again.
A range then formed, finally, price will break out of the range for a short term selling opportunity and then a proper pullback will form and there’s a chance to go long. Wrong.
The range never showed any signs of breaking down. The SMA did cross but price never showed any weakness. And I was only looking for a short opportunity, one that never came.
Price just broke out of the range. A certain bias, my own psychology and just the lack of conviction caused me to lose out.
LESSON: Eliminate that bias. Do not listen to the news or any articles read. All those information was based on the price action in the past. Match reports only comes out AFTER the football match. The players on the field will have to make the choices and moves that will be reflected in the match report. Likewise.
Do not let it get into your head when someone says “Oh, the dollar is strengthening”, “Oh, the Euro is weakening”. It was strengthening and it was weakening. Whether it still is is up to you to analyse and decide, nobody can guarantee.