Instrument: EURUSD
Trade Type: Short
Timeframe: 4HR
Entry Price: 1.02665
Stop Loss (SL): 1.02923
Take Profit: (TP): N/A
Risk-Reward Ratio: N/A
Outcome: Not Profitable
Entry/Analysis
This morning, my attention was drawn to the EUR/USD pair after identifying a well-defined short setup. The pair had recently broken a key support zone, and as price pulled back to retest this level, it presented a high-probability resistance area for entry. Late Monday night, price action displayed clear rejection at this zone, further solidifying my bearish bias. Supporting my decision was the sustained bearish momentum observed over recent sessions, with price trading comfortably below the 200 EMA, a key indicator I use to gauge trend direction. These factors, combined with the prevailing dollar strength in recent weeks, led me to anticipate further downside. I executed the trade with a carefully calculated stop-loss just above the resistance level and a target aligned with the next major support zone. At the time of entry, the setup adhered to my trading strategy and demonstrated a favorable risk-to-reward ratio. My analysis also considered ongoing concerns about the ECB's dovish stance, which had recently put pressure on the euro.
Exit/Outcome
As the day unfolded, unforeseen fundamental developments disrupted the technical narrative. Reports emerged indicating potential delays and a reassessment of proposed U.S. tariffs by the Trump administration, which introduced uncertainty into the dollar's strength. This news triggered a sharp dollar sell-off, shifting market sentiment and driving a bullish reversal in EUR/USD. The resistance zone I had identified failed to hold as price surged through, ultimately hitting my stop-loss. The breach marked a significant invalidation of the setup, highlighting how quickly market conditions can shift due to fundamental factors. While the technical setup was sound at the time of entry, the absence of a deeper understanding of these fundamental drivers left me exposed to this unexpected outcome. Reflecting on the trade, it’s clear that the lesson extends beyond the mechanics of execution—it underscores the necessity of integrating real-time macroeconomic developments into my pre-trade analysis.
Psychology
Despite the trade resulting in a loss, I am proud of the discipline I demonstrated throughout. I followed my trading plan to the letter, resisting the temptation to manually close the position as price moved against me. This commitment to my process ensures that my trading remains consistent and systematic, regardless of individual outcomes. However, this trade illuminated an important area for growth: the integration of fundamentals alongside technicals. Had I been more attuned to the implications of the U.S. tariff news and its potential to impact dollar strength, I might have exercised greater caution or opted to stay out of the market entirely. This experience serves as a reminder that trading is not just about finding good setups but also about adapting to the dynamic interplay of technical and fundamental forces. While the loss was a setback, my psychology and execution remain key strengths. I remain focused on continuous improvement and refining my approach to better navigate the challenges of the market.
Execution: 2/3
Psychology: 3/3
Overall Trade: 5/6
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