Instrument: EURUSD
Trade Type: Short
Timeframe: [4HR]
Entry Price: [1.08729]
Stop Loss (SL): [1.08828]
Take Profit (TP):[1.08429]
Risk-Reward Ratio: 1:3
Outcome: Profit
Entry/Analysis
The EUR/USD pair had been testing a significant support level throughout the week, which eventually broke, indicating a strong downward momentum. After this breakout, I anticipated a potential pullback and retest of the newly formed resistance (previous support) before continuing its downward movement. I set a sell limit order at this level to capitalize on a retest scenario.
On Thursday, October 17th, jobless claims and retail sales data were released. The jobless claims report came in better than expected, signaling a strengthening U.S. labor market, and retail sales also beat expectations, coming in at 0.4% versus the previous 0.1%. This positive economic data contributed to a swift move upward, triggering my sell order as price retested the new resistance. The EUR/USD pair reversed almost immediately after hitting my order, in line with my analysis, and began moving in my direction. This was one of the cleanest executions I've experienced, as the price hit my entry with a wick before reversing sharply in favor of the trade.
Exit/Outcome
As the U.S. dollar continued to gain strength throughout the day and into the night, EUR/USD moved decisively lower, validating my sell position. I had implemented a trailing stop-loss to protect profits, and while the dollar maintained strength overnight, there was a slight loss of momentum early the following morning. The pair retraced toward my trailing stop-loss, which was eventually hit, closing the trade with a 1:3 risk-reward ratio. This resulted in a highly profitable trade, well-executed both in terms of strategy and risk management.
Psychology
This trade was a prime example of the importance of patience and sticking to a plan. After the initial breakout, it was tempting to jump into the market, but waiting for a proper retest at the newly formed resistance paid off. I remained calm throughout the execution, trusting my analysis and allowing the trade to play out without interfering. Even as price quickly spiked due to the economic data releases, I maintained confidence in my strategy. My emotional control was crucial, particularly as the price began to lose momentum near my trailing stop. Instead of panicking or moving my stop, I trusted the process, which ultimately allowed me to lock in significant profits.
The data releases were pivotal in this trade. Jobless claims, which reflect labor market conditions, showed fewer people filing for unemployment, boosting the dollar, while stronger-than-expected retail sales indicated robust consumer spending, adding further strength to the greenback. Both reports aligned well with my strategy to short EUR/USD based on the prevailing bearish trend and economic fundamentals​. This was a textbook trade where patience, data-driven decision-making, and sound risk management worked in harmony.
Trade Score:
Execution: 3/3
Psychology: 3/3
Overall Trade: 6/6
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