I think that benefited me as there would be a lot of false signals to re-enter the short at a better price. Not unless, I choose a very big stop loss, I would have got killed by those signals.
This morning, the price has developed. It formed a very nice Bearish Butterfly and with Head and Shoulder (chart pattern) at point D. And I shorted near the top of the right shoulder as there was rejection points being noted throughout the chart. This is an example of combining price pattern and chart pattern.
Update:
I have been washed out by the market. Something I have overlooked is the supporting trend line. My overall view of GBP is on the weak side, that could be the reason why I overlooked. Time to regroup on this pair.
To think about it. It must because it broke the TL yesterday and I removed it, thus forgotten the big picture. This should be a common trap that many traders faced. This is also one of the reason why I strongly believe proper technical analysis is the way to go and not believing blindly on certain set of indicators and call it a system. Trading by itself is already tough, so why believe in dumb formulas.
4 comments:
Eric, don't quite understand why you drew the butterfly on 15m chart instead?
Since we use H4 as road map (which is caught in a tight range for GBPUSD), and on H1, it looked like it was edging up and testing the weekly pivot a few times this week.
what's how strict should i be with my self next time, as to whether i only draw patterns on H1 chart or can i also draw them on 15 min or 5 min.
You would say, we must reconcile the time frames, but then again, GBPUSD looked more bullish in H1 than 15 min.
we can discuss this when opp arise.
cheers.
Tony, you are right. Subconsciously, I was holding a bearish view based on my road map. And I was trying to trade counter trend due to the current uptrend channel. I guess, I lost my focus and forgot to close off my trade fast enough.
Actually, it did almost hit my TP, I was just not there to manage my trade and close it off.
Always keep a TL to see if it is retested on rebound. Remove it after price had moved far away that the TL seem insignificant.
Thanks Mel.. It is a good reminder for all traders
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