Reference Daily Uptrend support line broken and turning into resistance with added confluence of newly formed downtrend resistance line. 1030SMA providing the TAZ with the 30 SMA seemingly well-respected. Also, that sell area as shown is the support point that determined the prior uptrend to be broken.
Entry on 4H The limit order placed reflects the FOMO recently faced and the irrational desire to enter at the top tip, which is simply not practical and requires guesswork which might end up costly.
What should have been done: Go down to the 1H (or any lower) timeframe and stop sell the break of the corrective trend line as a way of confirmation. Let the bounce off at the confluence be behind.
1% capital risked for potentially 3.6R.
Entry: 1.415 | Stop loss: 1.43 | Target Profit: 1.36
Psychology and emotions – FOMO missing out definitely shining here, as with all other limit orders. Trading with the trend and following the plan though so that’s good.
The limit order did work out this time. Stop loss shifted down to 1.425. Was it a little too conservative in the first place? I think so. But after getting prematurely stopped out in trade 14, might be alright.
Here’s the other alternative, which might be better, as mentioned earlier. Go down to a lower timeframe, and trade the break out of the trend line supporting the corrective wave. Stop sell order could be placed under the wicks. This entry could also provide with a tighter stop loss, increasing position size and R-performance.
What’s more preferable? I’d say next time try and do both. If area of confluence is strong, limit order and risk 0.5% and then a stop order with a tighter stop loss risking the second 0.5%. Scaling in and adding to winners is also good trade management.
On a slightly longer term, the daily, that was just a corrective wave and the uptrend seems like it is going to resume with a neat break succeeding a pinbar on a former support turned resistance. Uptrend line could also be adjusted to fit.
What should’ve been done: Notice on the daily timeframe that the selling was relatively weak and the failure of the corrective trend line was to be expected.
The manual exit resulted in a 0.2% loss instead of 0.7% after shifting from 1% initially.