Despite the good set-up, my gut was never comfortable with this trade, so I closed early for a 13 basis point gain.
It's possible my decision was motivated by a fear, but I can explain my intuition. Six consecutive daily red closes made the long a little obvious, and the room to weekly ATR was concerning. Despite the nice IQM, we were not in a clearly defined weekly uptrend, and it felt like I was trying to pick a bottom. My fear was we would continue lower and target stops under the recent lows.
I was also concerned about the breakdown in correlation between risk and the USD. Equities were bid, but AUD was not rallying. USD was showing strength across the board, and I felt participants who bought AUD enticed by equity strength might fuel the next leg down when it became apparent the old relationship was no longer valid (for now).
At this stage, the exit early appears to be a mistake, with price now 30 pips (+40 bps) higher. However, had price fallen I'd be upset for not listening to my gut, so the chances for regret cancel each other out. My trading plan allows for discretion on exits, as I believe experience can make a difference in avoiding danger. Time will be the judge.
