A Volatile Trading Day and When to Walk Away

It’s Friday morning, just before 7:30 A.M. EST, and I’m already watching the market. My main focus is a short position on the EUR/USD I’ve been managing since Wednesday. A big economic report, the Trade Balance number, is due at 8:30 A.M., which means things could get volatile. I’m preparing to use tight 60-second stops on any open trades to manage risk.

First, I check the Wave’s middle line for my EUR/USD trade. It’s sitting just above 1.2040, only five pips from my initial stop, so I decide to leave it alone. No need to make a move just yet.

Then 8:30 A.M. hits. The Trade Balance number is out, and the U.S. Dollar Index gets knocked down hard, dropping from over 90 to 89.75. This immediately sends ripples through my positions. Suddenly, the EUR/USD is showing strength, which is the last thing I want to see while holding a short. This is the reality of any ; you have to react to the data as it comes.

But it wasn't all bad news. My long position in the British pound was soaring. A price spike early in the morning, before I even woke up, had already hit my first profit target and automatically sold half my position. Now, with prices pushing past 1.7550, I quickly put in an order to sell the rest. A sudden move like that doesn’t signal a new trend, so the smart play is to trust the charts, take the profit at a logical resistance level, and get out. It was so far beyond my original exit point that it was pure gravy. Within minutes, I was flat on the pound.

Searching for the Next Opportunity

After closing the pound trade, I started my usual routine: scanning through my charts alphabetically, from the 30-minute up to the daily. It's a simple system, but it keeps me organized.

I noticed the Australian dollar had broken to the upside earlier in the morning on the shorter-term charts. But the 180-minute chart showed a more interesting setup that looked ready for a breakout. The MACD histogram was above the zero line, signaling that I could place a proactive buy order at the breakout level of 0.7440.

What made this level particularly strong was its confluence with the 0.886 Fibonacci level. It’s always a good sign when different technical indicators point to the same price. It means traders who watch trend lines and traders who use Fibonacci are all seeing the same thing, giving the level more weight. This is a great tip for anyone ; look for multiple reasons to believe in a price level.

With this setup, all I needed was for the price to trigger my entry. Of course, every pattern is two-sided. The support level was waiting down at the 0.382 Fibonacci level, just under the psychological 0.7400 mark.

Why You Have to Expect the Unexpected

And then, the market did what it does best: the unexpected. Instead of breaking out, the price broke down hard during the next candle.

This is a perfect example of why having strict rules for is so critical. There was no way to anticipate this move with an order. The MACD histogram never confirmed a breakdown, so a proactive sell order was out of the question. And since the price never touched 0.7440, my buy order was never triggered. While some might encourage taking a gamble, disciplined trading is about waiting for confirmation.

Looking back at the broader market, this was all tied to that 8:30 A.M. news release. The U.S. dollar’s sharp drop caused the USD/CHF to sell off through support while the EUR/USD rallied through resistance.

But the chaos didn't stop there. By 10:00 A.M., within 90 minutes, the dollar completely reversed course and rallied. This caused the Swissy and the euro to reverse their moves as well.

The Smartest Trade Is Sometimes No Trade

Here’s the main takeaway: none of this was tradable according to my strategy. The moves were too fast and lacked the MACD confirmation needed for a proactive entry. The market volatility had skewed the charts so much that the best decision was simply to walk away. Unlike many , successful trading often depends on knowing when to sit on your hands.

With that in mind, I decided to close my original EUR/USD trade from the daily chart. I got out at 1.1905, just ahead of the 1.1900 psychological level. It's a good practice when to clean up positions before the weekend. I closed out the week completely flat, with no open trades, ready to start fresh on Monday.