The Dangers Of Indecision

This is a review of a recent trade that I took. Specifically, I flipped my decision and ended up taking a loss while missing out on the opportunity completely.

While the primary issue here was prematurely closing the trade due to a fear of loss. Let's take a look.

GBPAUD 4-Hour

Over on the 4-hour time frame, there's a nice range structure. While I didn't trade this range, I have been monitoring this pair. Price tested the lower boundary and invalidated it. This is the first indication that this might be a lower breakout play.

As I continued to monitor this pair, price attempted to trade higher but didn't sustain. As a result, I entered on a nice lower upper wick. As of now, I think my decision quality has been solid. I established a directional bias based on what price told me.

Now let's talk about the problem. I highlighted my trades over on the hourly time frame.

GBPAUD 1-Hour

After I entered my sell trade, I admittedly panicked as price failed to trade lower and began rallying. What did I impulsively do? I closed my short position and reversed my entry. I entered a long position thinking that this might've been a false breakout.

One problem with this entire thought process was that I never bothered to wait for the hourly level to invalidate. It is entirely possible for price to hold below that 1.8041 level. Consequently, I hit my stop loss on my long position and missed the entire selloff.

Indecision got the best of me here. This is a small setback, but I'll continue to improve my decision quality.