When In Doubt, Sit Out

Easy to say, but hard to learn. I took a set of trades that were quite comparable to the 2020 Presidential Debate. In short, a complete shitshow.

This post will be rather short. I'll highlight my mistake of trying to "predict" a directional move when the optimal decision would've been sitting out.

The currency pair in question is GBPUSD. Hopefully, the sequence of the arrows will give you a good indication of my entry, exit, and direction.

GBPUSD 1-Hour

After watching this pair, it began trading around one of the levels (1.2854) that I was watching. After the second time price crossed above this level, I sold this pair thinking that buying pressure must've been exhausted given that price dropped below this level much more quickly. Price traded and held above this level shortly after so I panicked. What did I do? I closed my position. After watching the price action for a bit longer, we see a bearish bar with a very long upper wick. Given that there wasn't any further selling momentum, I re-entered and bought this pair. As you can see, it quickly traded below this level and I got out.

After staring at this chart for quite a bit and reviewing my actions, here's everything that I did incorrectly. I'll break this down for each trade.

Trade #1:

I don't think there was anything wrong with selling this pair. The initial price action did support it as the DXY was retracing back to the original boundary breakout. In other words, I expected strength in the dollar and for the other major pairs to sell off. When I entered the sell trade, I classified it as a fakeout, which is what I consider a false breakout on the upside.
When price spiked up, it didn't come near my stop loss. I should've let this trade breathe instead of trying to manage it live. Even though the latest candle spiked up, I shouldn't have panicked because I know I focus on market structure rather than the movement of individual candles in isolation.

Trade #2:

This trade never should've happened. After I exited, this level should've been considered invalidated. Price no longer demonstrated a clear reaction to this level. This would mean that we're not seeing clear order flow. As such, I shouldn't have taken a follow up trade. This could've been done later on when we see a better structure.
On another note, I should've monitored the DXY to see how it was reacting. Depending on whether the DXY held up against the initial breakout boundary, this would've generated a directional bias. Since I didn't see any clear direction on the DXY, sitting and monitoring would've been the best approach.