Instrument: EURUSD
Trade Type: Short
Timeframe: [4HR]
Entry Price: [1.08726]
Stop Loss (SL): [1.08924]
Take Profit (TP): [N/A]
Risk-Reward Ratio: N/A
Outcome: Non-Profitable
Entry/Analysis:
I sell limit order on EUR/USD has been set at 1.08726, based on recent price action indicating a rejection from a strong supply zone, a level that has historically shown resistance. The sustained bearish trend from late September through October 23rd supports a downward bias, and my expectation is that price will pull back to this level for a retest before potentially continuing its decline. A sell limit has been set at this zone for potential execution, with a stop loss placed above to allow room for volatility. This positioning aligns with the 200-day moving average, which is currently above the price level, further reinforcing the bearish sentiment.
Additionally, U.S. jobless claims data is expected later in the day, which could impact dollar strength and, consequently, EUR/USD. I have factored this into my stop loss placement to account for potential price fluctuations surrounding the release. My take-profit target is positioned at a nearby support level, previously a point of buying interest, to maintain a favorable risk-to-reward ratio. By basing the trade on both technical and fundamental factors, I aim to maximize the probability of success while managing risks effectively.
Exit/Outcome:
My short trade on EUR/USD was initiated via a sell limit order at a key supply zone. After my entry was triggered, price consolidated around the supply zone in anticipation of the non-farm payroll (NFP) report, which was a critical market event scheduled for release later in the day on Friday. When the NFP data was released, it showed a weaker-than-expected outcome for the U.S. dollar, creating a short-term surge in EUR/USD. This spike in volatility caused price to breach my supply zone, hitting my stop loss. Following the data-driven movement, price reversed, retracing below the initial entry level and back into the supply zone. Despite this temporary retracement, the trade was already closed as per my risk management rules.
Although the outcome was a loss, my adherence to my trading plan and stop-loss placement served its purpose. The trade’s execution, from entry to exit, demonstrated consistency with my strategy and reinforced the importance of disciplined risk management around major economic releases like NFP.
Psychology:
From a psychological standpoint, this trade presented valuable lessons in discipline and emotional control. Knowing the potential for increased volatility around the NFP release, I experienced the natural temptation to manage the trade manually and consider an early exit as price hovered around my entry point. However, I actively reminded myself of my commitment to sticking to the strategy’s rules and allowing the trade to play out without interference. This resolve enabled me to stay calm, focused, and resilient even as price moved against my position.
By maintaining a mindset of acceptance, I found I could calmly process the stop-out as part of my trading journey, rather than a personal setback. Accepting the risk beforehand helped reinforce my confidence in my strategy and prevented impulsive decisions. This trade exemplified what I consider a "graceful underperformance" — it didn’t yield a profit, yet it allowed me to respect my process, manage my mindset, and take valuable insights forward into future trades.
Execution: 3/3
Psychology: 3/3
Overall Trade: 6/6
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