EURUSD D1, Major Falling Channel, Broken Below Major Support Zone
EURUSD.M15 20161024 entry.png
EURUSD M15, Retracement Channel Completed at Support Turned Resistance Level 1.0896

Technical Analysis:
The price is falling within a major falling channel and has also broken below the bottom of a major support zone at 1.0962.

Since then, the price has fallen further and is currently making retracement and completed a minor retracement channel at a support turned resistance level 1.0896.

Market Sentiment:
Since ECB Press Conference, the euro has turned rather bearish not just from the conference itself, but also because on the technical chart, the price has broken below a major support zone and is falling towards the bottom of a major falling trend channel based on D1 chart. The dollar is slightly bullish as a Fed rate hike is very likely in December.

Trading Plan:
Short with 1/2 risk as this is the 3rd wave of depreciation and is more prone to exhaustion and reversal.

Stop loss is set right at the swing high of a probable 3rd retracement.

The price is expected to reach the bottom of the major falling trend channel and thus take profit one is seen at the beginning of a key support zone at 1.0823, and take profit two at 1.0759, deep within the key support zone.

EURUSD M15, Take Profit Levels

[25/10/16 18:00]Stop loss shifted from 1.0915 to 1.0927 in expectation of a probable 2nd major retracement which will land the price at FR61.8%.

If the price falls beyond the current swing low, the stop loss will be readjusted to the retracement swing high at 1.0898.EURUSD.M15 20161025 mod1.png

[23:10] Shifted stop loss to entry price as Draghi will be speaking at 23:30.

[23:25] Shifted stop lossĀ again to previous retracement swing high.

[23:33] Price hit Stop Loss due to market sentiment changes caused by Draghi’s speech.

[23:34] Re-entered another 1/2 risk as the price was seen resisted at previous swing high and also due to emotions caused by the previous stop outs.EURUSD.M15 20161025 mod3.png

[26/10/16 2:19] Re-entry hit stop loss caused by a minor spike.

Results: Loss 2.09%EURUSD.M15 20161026 results.png

For the initial entry, I have missed spotting the key sign of exhaustion and reversal. This can be identified by applying the Crab Pattern which will show that the price started to reverse at FR127.2% of the Crab.

EURUSD.M15 20161026 Learning1.png
EURUSD M15, Crab Formed at FR127.2% Within Key Support Zone

It was also due to my failure to identify that the price has reached a key support zone which can be identified on the D1 chart.

EURUSD.Daily 20161026 Learning2.png
EURUSD D1, Price Rebounding Off From Key Support Zone

This taught me to always check back with a higher timeframe to identify key and major levels that I need to take note of for my trading plan which will also help me to identify the next trading opportunity.

Imagine that if I noticed that the price is reaching a key or major support zone and I closed my running trade, I could have made a good profit. On top of that, the Crab pattern will allow me to make a new trade to long and I would have captured the 1st wave of reversal, followed by applying the Retracement Channel strategy to capture the 2nd wave of the trend.

Lastly, never enter a trade impulsively due to a wrong trading decision whereby, in this case, it was the wrong decision of shifting my stop loss to a key resistance level and then re-enter another trade emotionally by convincing myself that this is a resistance and the reversal was temporary. It was clear that this trade has failed and I should not make another trade without applying any of my trading strategies. Furthermore, the stop loss for the re-entry was not even reasonably set.

No matter how great or how hopeful a trade is, it can still fail. When that happens, take the damage, learn the lesson and turn it into your strength to engage the next trade. You will eventually make your best trade because now you know how.