In this setup, we were looking to go long due to a demand zone. We were also looking for price to fade its previous drop, as we have seen this multiple times in the market. However, as you can see, price didn’t do what we wanted it to and instead fell lower and made a lower low.
In hindsight, we should not have taken this setup as the trend was bearish. However, due to the risk/reward, we assumed it was worth it. Safe to say that to avoid these kinds of losses, you should always stick to the trend.
This was an interesting setup from start to end. The idea behind the entry was a potential retest of an upward channel that price was in. Price did exactly that but instead of reversing at our entry, price went higher, a pip or two away from our stop loss before reversing. In hindsight, this would have been a better entry as there was a high previously at that level (look left).
Price reversed quite a bit, however not enough to hit our target. If we had had a more conservative entry, this would not have been the case as price would have hit our target. Price then went on to climb higher before hitting our stop loss. This made it two losses in a row for the week.
One word to describe this setup: wasted.
Wasted because we could have taken a lot more from this. Nevertheless, after two straight losers, we’ll take it. The reason behind this setup was an order flow one. We were looking for price to retrace higher in search for more liquidity before reversing again. The idea was right, however the execution could have been better. We almost got stopped out by about a pip, but we were lucky enough to have price reverse straight towards our target.
In hindsight, we should have had our entry above the red line, because that would have been a prime area for liquidity as retail traders who had previously sold at that area would have had their stop losses around/above the red live.
After having a solid past few weeks, we’ve been humbled by the markets. We’re looking forward to what next week brings us!
Psst…we’ll even throw in a discount to get you started!