What a Failed Trade Taught Me About Sticking to a Plan
The first thing I do every morning is check for the day’s economic releases, or what I call “hot zones.” For anyone running a trading operation as a , knowing when big news is scheduled to drop is non-negotiable. But there’s a common misconception here. I’m not looking for news to trade; I’m looking for moments of potential chaos to be aware of.
My approach has always been to let the charts guide my decisions. In fact, just the other day, a EUR/USD trade I took was already hitting its profit targets well before a major announcement. This wasn't a fluke. I’ve found time and again that trying to capitalize on the volatility from fundamentals doesn't really boost my success rate. As a chartist, I respect the news, but I don't trade it. It just makes sense to know when the market might get a little wild.
Today, the big one on the calendar was the Initial Claims number at 8:30 A.M. EST. This is the kind of release that can really move the market.
The First Setup and a Quick Failure
Looking at the 30-minute chart for the EUR/USD, I saw a nice long setup trigger on the 7:30 A.M. candle. It’s no surprise I was focused on this pair; it’s the most actively traded major, making it a popular target for many involving the financial markets. My charts, using a combination of pivot points and Fibonacci levels, showed clear upside resistance if the price moved higher.
My plan was to set my initial stop-loss at the bottom of the current Wave pattern. However, with the 8:30 A.M. release on the horizon, I had a specific rule: my profit target orders would remain in place, but I'd remove my stop-loss for exactly 60 seconds after the news hit. This gives the price a moment to absorb the information without getting shaken out by a knee-jerk reaction.
As it turned out, the news release was a bit of a dud. There wasn't much volatility, with the price just bouncing between 1.2073 and 1.2057. But about 10 or 15 minutes later, the floor gave out. The price broke down through the bottom of the Wave and the key 1.2050 psychological level, stopping me out of the trade.
The Most Important Lesson: Don't Give Up on the Pattern
This is where many people running a in trading get discouraged. Your pattern fails, you lose a little money, and you’re tempted to ditch the setup entirely. But here’s the thing: you can’t give up on a good pattern just because it stopped you out once. It’s a tough pill to swallow, but it’s a core part of the discipline needed for this kind of .
My chart pattern, a sideways triangle, was still valid. So, I kept watching it, and sure enough, a new opportunity presented itself.
At 10:00 A.M., the price broke out to the upside, triggering a new entry at 1.2075. The move was confirmed by the MACD histogram, giving me confidence in the setup. My analysis pointed to the 1.2100 price level as significant resistance, making it a natural profit target. Depending on which chart I used for management, the pivot point and a key Fibonacci level would now act as support.
This is a classic example of why requires patience. As the price started moving in my favor, the final step was to scale out of the position, taking profits along the way. The initial trade might have failed, but sticking with the analysis gave me a second, better opportunity.
