Did I Trade Against Myself?
The post-election week has been rather dead. I got next to no signals on the key levels that I've plotted. This might have led me to forcing a trade on GBPAUD and taking a larger position. Not a good habit, but painful lesson learned.
The quick annotation on my chart summarized my thought process for entering this trade. I believe I was targeting a high enough R-multiple with the signal that was generated here. Keep in mind that everything to the right of the vertical line was not known to me at the time of my analysis.
Reflecting on this trade, the only mistake I made was the position size. Having sat out the first half of the trading week, I guess the FOMO effect was creeping in. Instead of taking my standard position size, I should've reduced risk even further to 0.5% or lower even.
Taking a look at this trade setup GBPAUD, I am aware of one incorrect decision.
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| GBPAUD 1-Hour |
Reflecting on this trade, the only mistake I made was the position size. Having sat out the first half of the trading week, I guess the FOMO effect was creeping in. Instead of taking my standard position size, I should've reduced risk even further to 0.5% or lower even.
In one of my earlier posts, I explained how continuation breakout patterns don't work for me. That would imply I shouldn't take these trades. By cutting my least successful setup, this would reduce losses on very low win rate trades.
However, I don't necessarily think it's wrong for me to take this trade. A very low win rate trade still makes sense if it aligns with the planned R-multiple. In this case, the next level is 1.84075. This level isn't being shown in my Tradingview screengrab. However, I have it plotted on my main CMC Markets platform since this is a key daily structural level where I'm expecting to see a strong price reaction. Using the 1.84075 level, my planned R-multiple is 9. If I can average a recognized R-multiple close to this, then I can achieve positive expectancy even on the continuation breakout pattern.