Distance to weekly ATR was the biggest oversight, but a few weeks ago I declined a EURGBP short on the same basis and, of course, it was a screamer!!!
Other problems were the lack of weekly 3SMA touch, and time of week (Tuesday). Although not a big sample, the image below clearly shows success rates rising towards the end of the week, as ATR is more likely to have been reached.
For these reasons I passed on the trade a number of times, but eventually entered after the event risk of RBA minutes had passed.
There was nothing on the lower time frames to warrant entry. No QM, harmonic pattern or trend line break/retest. In hindsight, it was fear of missing out that led me to take the position. The missed EURGBP opportunity haunted me, and I was scared of future regret.
I knew immediately knew that I had made the wrong decision when the market moved against me and took out the previous day's high, and once again it became a matter damage control.
Small profit was taken at opportune levels, and stops were narrowed, which reduced risk from 100 bps to 15 bps. A portion of the original position was let run in case of a miracle, but as expected, I got stopped out on a third push an hour after the US equity open.
It wasn't a terrible trade, but I can do more to stack the odds in my favour. From now I will ensure that we have at least reached ATR and touched the weekly 3SMA before considering entry. Although on occasion this might not be necessary, entering without these conditions is a lower percentage play. It's probably a lesson I had to learn, I'm just grateful it didn't cost a full 100 bps.
In general, my last three trades have not been great. I had to scramble out of the USDJPY long (which would have hit my stop), I was lucky to get out of the NZDUSD short for a profit as it subsequently rallied hard, and now this AUDNZD failure. Considering my last three trades were essentially wrong, I'm pleased to have escaped unscathed. But I do feel lately I've been trading not to lose, rather than to win, which can be dangerous. Return is a function of risk, and one can be too cautious.
I must find the balance of patience and aggression. Next time I want the odds overwhelmingly in my favour.
